Geoff Hoon: With permission, on behalf of Her Majesty's Government, I wish first to extend our condolences to the families and friends of the two members of Britain's armed forces who, it was confirmed this morning, were killed in action in an incident in north Helmand province in Afghanistan. Our thoughts and sympathies are with those close to them at this very difficult time.
	Combined Foreign and Commonwealth Office, Department for International Development, Ministry of Defence and Afghanistan drugs inter-departmental unit spending on Afghanistan for the financial year 2005-06 was more than £379 million. Those funds were used to support the British effort to assist the Government of Afghanistan across a number of areas including security, reconstruction, election support, counter-narcotics and institutional capacity building.

Tobias Ellwood: I join the tribute paid to our soldiers who were recently killed.
	I want to focus on what is happening under the umbrella of security that our soldiers are working so hard to create. I have just returned from Afghanistan, and I was shocked to see how bad co-ordination is on the international development and reconstruction front. There is a conflict of interests between United Nations and European Union agencies, as well as the myriad of non-governmental organisations that answer to no one. A fundamental lack of leadership is leading to the pursuing of separate agendas, and to the wasting of money as projects overlap. Does the Minister agree that the long-term success of Afghanistan hinges not only on the military capability that we are working so hard to achieve, but on what is happening under that security umbrella? We could be doing so much more with the money to which the Minister referred.

Geoff Hoon: I congratulate the hon. Gentleman on going to Afghanistan. It is not an easy journey, as I have found myself on many occasions. I am sorry that he found such a lack of co-ordination there.
	As for Britain's effort, in conjunction with our close allies, the establishment of the provincial reconstruction teams and their recent extension to the south were part of a deliberate policy—beginning in the north, then extending to the west and now to the south—linking military forces in a determined effort to establish security and combining them with officials from a number of Departments, including the Department for International Development and the Foreign Office, to achieve that security and also progress towards democracy and effective administration. That has been successful in the north and west, and it will be successful in the south.

Chris Mullin: Is my right hon. Friend aware that the crop substitution programme that we are hoping to fund in Helmand province is not going very well? Several hundred Afghan farmers who were persuaded to destroy their crops in 2004 are clutching cheques that have not been honoured. Understandably, they are rather angry about it, and we are bearing some of the brunt of their anger. Does my right hon. Friend agree that there is a danger that, if we are not careful, we will turn from liberators into oppressors? Has the time not come for a bit of blue skies thinking when it comes to dealing with the drug problem?

Geoff Hoon: My hon. Friend is right to raise some of the difficulties with the anti-narcotics programme in south Afghanistan in particular. I am sure that he will be the first to acknowledge that there was a 21 per cent. reduction in opium cultivation last year, although there have been some difficulties in the south.
	I accept that there is a disturbing relationship between those who are using some pretty appalling means of attacking British soldiers and British forces and those who are responsible for the distribution of drugs out of Afghanistan. It is that connection that we are determined to disrupt. It involves risks, as, sadly, we have seen, but at the same time it is part of our effort to secure the long-term reconstruction of the country.

Peter Tapsell: Are Foreign Office Ministers being kept informed of the increasingly unsatisfactory performance of President Karzai's Government? Is that not cause for concern, especially given that successive defence Ministers have told me, and the House, that a prime justification for our military intervention in southern Afghanistan was support for President Karzai and his Government?

Geoff Hoon: I suspect that I was one of those Ministers, and that remains the position of the British Government.
	Actually, there has been remarkable progress in Afghanistan since 2001. There have been presidential elections, parliamentary elections, and the establishment of a Government who are now increasingly able to extend their authority throughout the country. That is a success to celebrate. It does not mean that difficulties do not occur from time to time, but it is something on which I think we should all congratulate President Karzai and his Government. They are increasingly in control of their own country, as should be the case.

Malcolm Rifkind: At a time when the Taliban has launched its most serious offensive in the south in the past four years, will the British Government resist strenuously Donald Rumsfeld's stated intention to reduce the number of American troops in Afghanistan, and to justify that on the grounds of NATO's presence in the south? Will the Government accept that the timing could not be worse for any reduction in American troops at this moment?

Margaret Beckett: We have regular discussions with the United States Government about security and human rights issues. We deplore all violence, and call for a halt to killings, whether by abuse of state power, or by criminals and terrorists who use such violence for their own ends.

Margaret Beckett: We remain opposed to such killings. I cannot tell the hon. Gentleman of any such operations of which we are aware; nor indeed could I accept the suggestion that British Government personnel would have been involved in any such operations.

Ian McCartney: I will be going to China soon and I will be discussing some of these areas. I will do so in my usual forceful way —[ Interruption. ] I am a diplomat now, so it will be my diplomatic forceful way. The point has been well made on both sides of the House on this and other issues. The thing is to have regular dialogue and to offer support in terms of changing the whole nature of what my hon. Friend describes and encouraging China to make changes in its legal system in relation to the issues that he and others have raised. I give him and the House the assurance that I will regularly raise those issues, among others, while I am doing this job.

Ian McCartney: As late as 10 April this year, the Chinese authorities again strenuously denied what the hon. Gentleman is saying. Again, I can only reassure the House that I am having wide-ranging discussions on the issue with the Chinese. Points have been meticulously made by Members, parliamentary groups and Select Committees, and by non-governmental organisations and organisations with an interest in China that operate outside the House. Before I go to China, I will meet the non-governmental organisations to talk through the issues that they would like me to raise as a priority. When I come back, I will report back to the NGOs. I gave a commitment in the Foreign Affairs Committee debate to report back to the Committee, as well. I am happy, not about the issues, but to raise those issues systematically with our colleagues. It is important for the good relationship that we have with them to make progress on some of the issues that have been raised in the House.

Margaret Beckett: The Iraqi Government of national unity are now firmly in place and the business of government has begun in earnest. Prime Minister Maliki and his team are committed to working to a national unity agenda. They have announced a national reconciliation plan and set clear priorities—primarily security, electricity supply, economic reform, and building democratic structures. The hon. Gentleman may know that the Prime Minister announced on 19 June the imminent transfer of security responsibility in Muthanna province, to be followed by other provinces. Iraq will continue to need our support and that of the international community as it works on those priorities.

Andrew MacKinlay: Has the Minister ever had the feeling that officials have been less than candid with him? Can I draw to his attention that, following the submission of a series of parliamentary questions from me on this matter, there was convened in the Foreign and Commonwealth Office on 13 January a strategy handling meeting to deal with "Mackinlay's questions", which was attended by 13 officials from the FCO, the Ministry of Defence and the security and intelligence services? Why was that necessary to deal with my questions, if they are not hiding more information on this subject? Is it not a fact that unauthorised— [ Interruption. ]—the Minister may laugh, but this is a serious matter. There was greater involvement between Porton Down and the South Africans' chemical and biological weapons regime than they now wish to disclose.

Ian McCartney: In eight years in Government, I think that I can say with some certainty that no one has pulled the wool over my eyes yet—but one never knows. That meeting was not to handle my hon. Friend, but to handle his questions. He raised 22 questions with specific concerns and allegations, and I am happy to try to answer them, in conjunction with other relevant Departments—although we have already answered20 of the 22.
	The meeting was held to discuss the draft answers to my hon. Friend's parliamentary questions. Representatives of various Departments and agencies attended, including the Foreign and Commonwealth Office, the MOD and the Health Protection Agency.

Margaret Beckett: I repeat what I just said: there is no suggestion that we should try to bring forward something that would require a new treaty base. The hon. Gentleman will, I am sure, recall that a variety of measures were rolled into the constitutional treaty—if I may put it like that—some of which would not require a new treaty base, such as direct transmissionof information to national Parliaments. However, although the ideas that he referred to concerning the police and justice system have been raised by various individuals and commentators, there are no proposals to that effect.  [Interruption.] There are no proposals to that effect before us at the present time, and I do not intend to commit us to a referendum on proposals that have not even been put forward.

Dominic Grieve: On a point of order, Mr. Speaker. Today the Attorney-General has made an oral statement to the House of Lords concerning the collapse of the Jubilee line trial. You will recall that that was a matter on which there was a written ministerial statement to this House on 22 March 2005. The report that has been published is critical of the Crown Prosecution Service's handling of the case, points out that the use of the offence of conspiracy to defraud greatly muddled and added length to the proceedings, which is a topical matter for this House, and stressed that the fact that a jury was present at the trial was irrelevant to its collapse, with which the Attorney-General only a few moments ago stated that he disagreed, despite the fact that he himself commissioned that report. In those circumstances, is it appropriate that a statement of this kind should be made only in the other place and that the House should not have the benefit of the presence of the Solicitor-General to make a similar statement?

Claire Curtis-Thomas: I beg to move,
	That leave be given to bring in a Bill to establish an Office for the Regulation of the Sale and Display of Sexually Explicit Material; to require the Office to regulate the sale and display of such material; and for connected purposes.
	My Bill seeks to allow the appropriate regulation of sexually explicit material such as that in lads mags and the  Daily Sport and the  Sunday Sport.
	Before I begin, I must tell the House that much of the material from those publications that I would have liked to have quoted has, after long consultation with your office, Mr. Speaker, been deemed to be too obscene to be spoken in this Chamber. I ask Members present to reflect on the fact that while they may never have seen such material and are today unable to hear it read out loud in detail, those publications are available for purchase by children in nearly every single newsagent in Britain.
	My first example of such material is provided by the  Daily Sport and the  Sunday Sport. Inside such so-called newspapers, the overwhelming majority of the content comprises adverts for hard-core pornography, sex chat lines, national directories of sex shops and every other form of adult entertainment. There are quite literally thousands of adverts per issue—often page after page. One page alone may have up to 700 one-line ads for masseurs/escorts, accompanied by graphic images.
	Another shocking example of such disgraceful content is provided by the issue that covered Jane Longhurst's murder by a necrophile addict. In the  Daily Sport the sex life of her murderer was described as being a series of "adventurous romps". Jane's murder was not presented as a tragedy, but instead was degraded to what can only be described as a deviant narrative designed to appeal to the most depraved members of our society.
	The problem is compounded by banners across the top of the  Daily Sport that advertise hard-core sex websites. Those, hon. Members, are simply a portal to hard-core porn sites, which advertise the  Daily Sport, while hard-core porn mail-out catalogues in turn advertise the same paper.
	In a similar manner, lad mags—or so-called men's lifestyle magazines—provide another clear example of the total failure of current media regulation. Publications such as  FHM,  Zoo,  Nuts and the like are sexually explicit and highly sexually denigrating. The question hon. Members must ask themselves is why such publications are not on the top shelves, given that their content is barely indistinguishable from recognisable top-shelf pornography.
	In those publications, women are shown only as cheap and contemptible sexual commodities, fit only to be subjected to a range of exploitative violent and degrading activities. An example of the content is a recent issue of  Zoo magazine, which features images of girl-on-girl action and jokes about women enjoying being urinated on and having sex with animals. Its "tit op comp" invites men to win breast enlargements for their girlfriends, with the declared purpose of transforming them
	"into a happier, more generous, intelligent and interesting version of the slightly second rate person they are today."
	This is a magazine being sold or provided to young boys under the age of 16. What impressions are they gaining about the importance of a woman in our society and what messages are we sending to young girls? It is that we condone their use and misuse in any way that makes the editors, producers and distributors of this so-called literature a profit. Is this type of sexual activity and literature so normal that it can be displayed next to The Beano and  The Dandy? Hon. Members, something must be done.
	I believe that it is strongly in our interests as a society to restrict the availability of this material. Whilst those publications are clearly sexually explicit, exploitative and denigrating, there is currently no meaningful regulation in place to ensure that they are sold as age-restricted and on the top shelf. Throughout its history, the British media has achieved a balance between decency and freedom of expression. For centuries, our country has led the world in its ability to combine a freedom of choice for society while at the same time protecting its most vulnerable members. The availability and impact of publications such as  Zoo,  Nuts and the Daily Sport are undermining that reputation.
	Regulation has worked well for other industries. The British Board of Film Classification has allowed the film industry to go from strength to strength, whilst at the same time protecting the development of our nation's youth. A 9 pm television watershed and internet controls have given parents a choice over what their children watch or where they surf. Considering the success of such measures, why is there no regulatory mechanism in the print media that affords women and children a similar protection? If it is right to have measures in place to protect children within the film, TV and internet industries, why are they not in place for the explicit sex magazines and so-called newspapers that feature so freely on our nation's shelves? If that were the case, all the publications that I am concerned about would be rated 18-plus and would have to carry explicit warnings about their content.
	Currently, the Obscene Publications Act 1959 and the Indecent Displays (Control) Act 1981are entirely inadequate for the regulation of today's media. Those Acts are applied by the courts only to the most extreme forms of pornography and at present the law is simply not equipped to deal with the sort of material found in lad mags or the Daily Sport. Tellingly, there are no legal definitions of pornography in existence—not even of the word "indecent".
	Although the publishers of newspapers and magazines are currently regulated by the Press Complaints Commission, that body has no codes regarding sexual explicitness and it has refused to consider introducing guidelines even over the explicitness of the covers of newspapers and magazines. In a similar manner, while the sale of newspapers and magazines are monitored by a retail regulator, the National Federation of Retail Newsagents, it issues purely voluntary codes to retailers and has no powers to impose fines. Retailers are under no obligation whatsoever to abide by its recommendations.
	I have previously contacted WH Smith to discuss this issue, but the chairman refused to speak to me, presumably because he is very happy with the profits he is earning as a result of his role in promoting and distributing that literature. WH Smith is the largest distributor for such publications, and, despite hearing my arguments, it continues to make those publications available to children.
	Hon. Members, today we have an opportunity to force an industry to uphold those principles that we value in everyday life. The Bill proposes the establishment of a new, independent, non-partisan regulator for the sale and display of sexually explicit material, with binding codes and transparent, well publicised guidelines—a regulator that is socially responsible and not motivated by profit and could take the onus off commercially motivated retailers and publishers to act as regulators.
	I want our children and the women who have been the subject of sexual abuse and misuse to be properly protected from what is now freely displayed to them, and normalises and glamorises degrading and often violent activity. I believe that my measure will do something towards that surely admirable end. I commend it to the House.

Angela Watkinson: The Bill is clearly well intentioned in trying to protect minors from exposure to thoroughly unpleasant publications. There cannot be an hon. Member in the House who disagrees about the fact that minors deserve that protection and that their parents would expect the law to achieve that aim.
	I wish to oppose the Bill, however, because I believe that it is wrong in two respects: first, in its proposal that a Government office should be set up to regulate the sale and display of such material; secondly, in its failure to take proper account of the co-operation of the women portrayed.
	I became interested in the subject some months ago when I received a copy of the  Daily Sport in my postbag. I was surprised at how many large advertisements it contained for hard-core pornography, together with pictures of women wearing nothing more than a lascivious expression. I was even more surprised to find that that was eligible material for display alongside newspapers, where such publications are readily accessible to children.
	A range of lifestyle magazines is aimed at the teenage girl market, but there are no comparable publications, as far as I am aware, for teenage boys. Perhaps that gap in the market could be filled by a responsible publisher. If a lifestyle magazine could be produced that was attractive to teenage boys and acceptable to their parents, it might help reduce any curiosity that they might have in the grossly unsuitable publications that the Bill covers.
	The Bill includes no reference to the complicity of the women pictured in the publications. They are not victims. Women who take part willingly in that sort of photographic or film session, and are paid for their services, must surely take responsibility for their involvement. Portraying women as objects of disrespect at best and deserving of degradation, violence and utter contempt at worst does a great disservice to other women who may suffer at the hands of husbands or partners who have been influenced by what they have seen in those publications.
	A clear definition of what constitutes pornography is needed to encompass that type of publication and those that the hon. Lady described, which I have not seen, in the Obscene Publications Act 1959, so that they are consigned to the top shelf, away from the reach and eyes of children. We do not need yet another Government office—we have far too many already.
	The Bill is trying to do the right thing in the wrong way and I therefore oppose it.
	 Question put, pursuant to Standing Order No. 23 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.
	Bill ordered to be brought in by Mrs. Claire Curtis-Thomas, Annette Brooke, Dr. Evan Harris, Lynda Waltho, Andrew Selous, Helen Goodman, Mr. Barry Sheerman, Peter Bottomley, Stephen Hammond, Mrs. Siân C. James, Ms Diane Abbott and Rosie Cooper.

John Hutton: I shall address that point in a second, but that is not the view of my right hon. Friend the Chancellor.
	Our task is to forge a real and lasting consensus both in the Chamber—I hope that it will include the right hon. Member for Wokingham (Mr. Redwood)—and across the country. We all know the importance of pensions to our constituents, and it is our responsibility to try to reach agreement on the pensions system to enable the people whom we represent to make future savings decisions with the confidence that those reforms will last between the generations.
	It is right that the debate about pensions should continue—indeed, the White Paper encourages that process—and I look forward to the contributions from hon. Members on both sides of the House to today's debate.

John Hutton: I will give way once more, but then I want to make progress, because there is a time limit on Back-Bench contributions.

John Hutton: As the hon. Gentleman knows, the Chancellor keeps all taxation issues under regular review. When this matter was considered in the course of the Pension Commission's work, it decided not to make any recommendations, at least in part because of the complexity of the system. However, those are matters for my right hon. Friend the Chancellor. Taken as a whole, the measures that we propose in the White Paper are affordable and sustainable over the long term because we have not been prepared to avoid making those difficult decisions.

John Hutton: With great respect to hon. Members on both sides of the House, I intend to make a little progress with my speech and then give way later. I know that there is a lot of interest in the issue of the financial assistance scheme, and I am sure that my hon. Friend the Minister for Pensions Reform will deal with some of the points that arise when he winds up.
	I want to turn briefly to the recent report of the parliamentary commissioner on pensions. While I have repeatedly made clear that we disagree with the ombudsman's finding of maladministration by my Department, and have therefore not been able to accept her recommendations calling for compensation along the lines that she proposed, we obviously have the greatest sympathy with those who have lost some or all of their pensions. I have met people who have been affected and am acutely aware of the difficulties that they undoubtedly face. They believe that they have been robbed of their pensions, and I entirely understand that feeling of injustice.
	At the time of the ombudsman's report, we had already committed ourselves to a review of the financial assistance scheme. In March, the Prime Minister announced that we had expedited the review, and last month I announced that we had decided to extend the scheme to cover eligible people who were within 15 years of their scheme's normal retirement age on 14 May 2004.

John Hutton: I will do so a bit later, if my hon. Friend will bear with me.
	In extending the financial assistance available in that way, we took proper account of the issues raised in the ombudsman's report. The scheme will now cover some 40,000 people, and—as I said in response to my hon. Friend the Member for Sunderland, South (Mr. Mullin)—it represents a substantial additional investment, taking the total cash funding from £400 million to more than £2 billion.
	In making its recommendations, the Pension Commission acknowledged the progress that we had made since 1997. Its report was designed to build on that progress. The commission made clear that there was no immediate pensions crisis, but said that there would certainly be one if we did not act soon. It identified four principal challenges. First, there was the problem of undersaving, affecting perhaps as many as 12 million people. Secondly, by 2050 there would be50 per cent. more pensioners than there are today. Over the same period, the ratio of people in work to those in retirement would halve. In fact, the latest research has revealed that during the last 20 years, life expectancy at the age of 65 has grown at the rate of about 15 minutes per hour.

John McFall: In the light of his comments about longevity, will the Secretary of State now extend his speech? I think we should look again at the statistic involving15 minutes per hour.
	As the Secretary of State will know, the Treasury Committee published a report on the national pensions saving scheme. We recommended two things: simplicity and minimum regulation. If we secure those, we can achieve what the Pensions Commission said would be 30 basis points for management charges. Can the Secretary of State assure us that the Government are considering that figure rather than, say, 0.6 per cent. or 1 per cent.? It is important, for the sake of the pot at the end of the day, that the minimum is charged.

John Hutton: I congratulate my right hon. Friend on the Treasury Committee's excellent report, which has helped our thinking greatly. He is right to say that at the heart of making personal accounts a success will be our ability to keep the costs and charges associated with them as low as possible. I recently returned from a trip to Washington, where a similar scheme has been in operation for about 20 years for federal employees. It operates not at 30 basis points, not at 20, but at five. I am not saying that we can get down to five as a starting point for personal accounts, but I think that the scale of the potential investment in personal accounts, along with automatic enrolment, present a prospect of considerable advances in scheme administration costs.
	The proposals in the White Paper will address the principal challenges identified by the Pensions Commission, and that is particularly true in relation to personal accounts. As a result of the changes we propose, up to 10 million people could be saving in a new low-cost personal account. By retirement, their pension funds could be worth up to around 25 per cent. more because of the lower charges, to which my right hon. Friend alluded. It is estimated that personal accounts will generate an additional £4 billion to£5 billion of saving every year, equivalent to around0.5 per cent. of gross domestic product.
	We are consulting on the best administration model for the accounts, and particularly on whether there is value in offering consumers a choice of branded provider. It is perfectly proper for the Opposition motion to refer to that ongoing work and we will host a stakeholder summit as part of the consultation later in July, to which the main Opposition parties have been invited. We will publish a further document later this year setting out the detail of the approach that we intend to take. I hope that that approach will have the support of the spokesmen for both main Opposition parties.
	Personal accounts are the key to empowering personal responsibility. We estimate that by 2050 a regular saver, who saved from age 25 into a personal account with total contributions of 8 per cent. and on median earnings, could be up to £50 a week better off than if the system continues as it is today. That is, in part, the power of compound interest. So while there will always be specific individual circumstances, such as debt or stock market performance, that will affect people's savings, fundamentally the package of reforms in the White Paper will mean that people should be better off in retirement from having saved themselves.
	However, to achieve that result and enable people to save in personal accounts with confidence, it will also be necessary to make reforms to the state pension. Our reforms to modernise the contributory principle and enable more women and carers to qualify for the state pension will deliver much fairer outcomes. And by restoring the earnings link and simplifying the state second pension so that it gradually becomes a flat-rate weekly top-up to the basic state pension—an already existing trend and a change recommended by the Pensions Commission—we will make the state pension simpler and more generous, while reducing the spread of means-testing and providing a solid foundation on which to build a sustained expansion of private savings.
	A person retiring in around 2050 who has been in employment or caring throughout their working life could receive a contributory state pension worth £135 a week in today's earnings terms, which is £20 a week above the guaranteed income level. Without those reforms, people retiring in 2050 would receive a total contributory state pension—including the basic state pension and the state second pension—worth between £90 and £100 a week, well below the current means-tested threshold. That would not be an acceptable outcome.
	The White Paper announced our commitment to continue to uprate pension credit in line with earnings, locking in our progress on pensioner poverty and preventing half a million pensioners from falling into poverty between now and 2012. But we will also be able to limit the spread of means-testing. We will make an immediate start on that by modifying the calculation of the savings credit from 2008. That gives a clear indication from the outset of our determination to make clear people's incentives to save. As a result of that change and our restoration of the earnings link, by 2050 only about a third of pensioners, or fewer, will be eligible for pension credit, instead of some 70 per cent. if current uprating policies continued.
	I wish to make one very important point. Of the third of pensioners who will continue to be eligible for pension credit, only about 6 per cent. will receive the guarantee credit alone, which means that in the vast majority of cases, those receiving pension credit will be rewarded because they have saved for their retirement, and that has got to be the right policy. So when people criticise the level of means-testing in our proposals, they need to reflect on that very important feature.

John Hutton: I will describe the changes briefly. As my hon. Friend knows, we shall consult on the detail, but in broad terms we intend to introduce a new credit in the state pension system for those who have caring responsibilities of more than 20 hours of week. At present, credits can be accrued only if a person is in receipt of carer's allowance, which involves a minimum caring responsibility of 35 hours a week, so tens of thousands of carers will acquire new credits in relation to the state pension as a result of the changes that we propose to introduce through the White Paper and on which we hope to legislate in the next Session of Parliament. That is a significant reform, which many carers' organisations have been pressing on the Government for some time.
	I want to try to conclude my remarks as quickly as I can. I have probably detained the House long enough—[Hon. Members: "No, no."] None the less, I think I shall stick to my speech.
	Taken as package, the reforms can provide a framework for pensions that can last for generations to come—a future in which we give people the tools to take personal responsibility for building their retirement savings with confidence; and in which we deliver a system that is affordable and sustainable for the long term. That is the opportunity before the House today. In supporting our motion, the House can signal its support for the direction of travel set out in the White Paper, as I very much hope that it will. In doing so, it will help us all take a significant step towards a lasting pensions settlement, with a sustainable, affordable and trusted system that will meet the needs of those in retirement both now and well into the future.

Philip Hammond: I beg to move, at the end of the Question, to add:
	", recognises the importance of consensus in ensuring long-term, affordable and sustainable pension reform; and therefore welcomes the commitment of all major parties in the House to engage in the process of consensus building, while acknowledging that a number of concerns remain to be addressed in the course of that process, including the impact of the projected future level of means-testing on savings behaviour, the design of an auto-enrolled savings scheme, the need to strengthen existing occupational pension provision to reduce the risk of 'levelling down' on the introduction of personal accounts and the need to restore public confidence in the fairness and security of the pensions system."
	I welcome the opportunity to hold this debate today. The amendment seeks to reinforce the message of support for the key principles and to underline our commitment to the consensus-building process, but also, as the Secretary of State has acknowledged, to place on record that there are a number of key issues that need to be addressed if a sustainable, affordable and lasting pension reform is to be introduced. We are clear that such a reform requires cross-party political consensus. The underlying purpose of the reforms is to create a stable platform of state provision upon which people can plan their own private saving. It is clear to us that that places a heavy burden on the Opposition in rising to the challenge of forming a genuine cross-party consensus. However, it also places a heavy burden on the Government, because a lasting consensus is one built around a sustainable proposition. It has to be a hard-edged consensus, not a woolly one. The Secretary of State will know that the history of recent pensions policy warns us of the fragility of any consensus built around a flawed proposition.
	In reaching for that consensus, it is essential that we analyse the details of the White Paper rigorously, and that we are prepared to challenge, without fear of ridicule by the Secretary of State, the areas where it is as yet unclear whether the proposals before us will deliver the objectives that we all share. There must also be a clear understanding that consensus is a two-way street. There is an obligation on the Government to listen to the concerns of the Opposition and others outside the House and to engage constructively in addressing them, working with us to explore alternative solutions where problems are identified.
	I will be frank with the Secretary of State: we were disappointed by the level of engagement between the Opposition and the Government before the publication of the White Paper. It was effectively a fait accompli. However, we are pleased by the clear signals that the Secretary of State has sent that he is now ready to engage. We are certainly ready to do so. We hope that the willingness for dialogue will extend to dialogue about the drafting of the Bill. Our clear preference is to spend the summer talking about the drafting of the more contentious areas of the Bill, rather than to spend the autumn tabling amendments to what the Government have presented.
	Our starting point for this exercise is a bout of realism—a recognition of the looming crisis in pensions provision. Increased longevity, lower investment returns and changing demographics have all created a situation that has to be addressed, but so too has the Chancellor's annual tax raid on pension funds, which was most recently estimated to cost about £7 billion a year—equivalent to about £175 billion wiped off capital value. Nine million people are not saving enough for an adequate retirement income. Half of all pensioners are eligible for means-tested benefits, and that figure is projected to grow to at least 75 per cent. by 2050. Some 1.6 million of those pensioners—800,000 of them among the poorest pensioners—are failing to claim what are supposed to be very well-targeted benefits. To cap that, 60,000 pension schemes, with 1 million members, have started wind-up since 1997.
	As a response to that catalogue the key elements of the White Paper, all of which we can enthusiastically support, include, as the Secretary of State said, the restoration of the earnings link, the raising of the basic state pension age over time, changes to the contribution regime to address the particular problems of poverty among women pensioners, and further encouragement of workplace saving. That has to mean workplace saving in existing occupational pension schemes, as well as through the tailoring of new arrangements specifically targeted at median and below median earners.
	If we are to build a robust consensus around those key principles, it must be based on knowledge and understanding, not on ignorance. The Secretary of State is right to say that the package has to be affordable. That means that the consensus that we build, both here and among the wider public, has to be based on parts of the package that deliver savings, as well as parts of the package that increase expenditure. A real consensus must be based around tough decisions as well as easy ones. The financing of the package must be transparent and openly debated.

John Hutton: I genuinely did not intend to interrupt the hon. Gentleman's speech, but let me point two things out to him. On the state second pension, the argument in favour of moving to flat rating is clearly set out in the Turner report—we have accepted those recommendations—so nothing is being done in a hidden or covert way. The argument is clear and profound.
	Let me ensure that the hon. Gentleman understands the situation regarding ADIs. The proposal represents a way of funding what is effectively a redistribution in the state pension system and tackling the problem to which the hon. Member for Strangford (Mrs. Robinson) referred, thus ensuring that more women have a direct entitlement to a full basic state pension. The money is being not withdrawn from the pension system, but used in a more intelligent way that reflects modern family relationships and modern life. I hope that the hon. Gentleman will be able to support the proposal. We are not doing anything secretly or covertly, because everything is out in the open. If I had the reference for the pages of the White Paper that explain all that, he could find the detail there.

Sandra Osborne: The hon. Gentleman makes a welcome commitment to trying to reach consensus on the way forward. We all accept that it is perfectly valid for him to wish to question aspects of the Government's proposals. However, if he decides to reject certain proposals at the end of the day, will he come up with viable alternatives that also promote affordability, which he says that he agrees with?

Philip Hammond: I am grateful to the hon. Lady for her intervention, and the Secretary of State is absolutely right, in that it is not open to anybody to reject all the elements of the package that save money for the Exchequer and then say that they would like to have all the elements that cost money. This has got to be affordable; we are fully signed up to that. The issue is about transparency and getting the debate going.
	I reiterate to the Secretary of State the point that the hon. Member for Yeovil (Mr. Laws) made. If we are to have a consensus-building process, it must involve our being able to ask questions to probe the detailed arrangements being put forward as part of this package. The Secretary of State cannot say to us that no cherry-picking means no right to question the route that has been chosen to deliver the objectives. We must be able to look in a grown-up way at how the arrangements work.
	My first point, then, is that transparency and openness in respect of the assumptions that lie behind the package and its financing are prerequisites for a durable consensus. But the other key concerns that need to be addressed, and on which I shall focus, are the impact of means-testing, the design of a workplace saving scheme and its interaction with existing occupational pension schemes, the certainty of the timetable for implementation, and pubic perceptions of the fairness and security of the pension system.
	The key purpose of the package is the promotion of saving among not just the 5.2 million people who are not saving at all, but the rest of the population, many of whom are not saving sufficiently for a decent income in retirement. The pension credit has created an expectation of growing levels of means-testing, with consequent effects on savings behaviour that we now collectively need to assess and address. We welcome the Secretary of State's confirmation that it was never intended that means-testing should reach the 75 or80 per cent. level predicted by Turner for 2050, but there remain major concerns about its impact on the proposed package.
	The Government themselves say that there will be about 30 per cent. means-testing in the system by 2050. Other experts—notably the Pensions Policy Institute—disagree with the baseline assessment and therefore arrive at a higher level; they suggest that as much as 45 per cent. of the pensioner population could be means-tested by 2050. Whether the proportion is 30 or 45 per cent., a serious question is being asked by expert observers: will means-testing at these levels, institutionalised as a permanent feature of the system, undermine the package's key savings-promoting objective? We must look at what impact this level of means-testing will have on the savings behaviour of—typically, but not always—people on the lowest incomes. They are most likely to have interrupted work patterns throughout their lives, and are thus most likely to be entitled to means-tested benefits in retirement.
	The fact is that we simply do not know what the answer is—we are in what I suggest is uncharted territory. This is probably the first time that we have had to consider behavioural responses to a long-term stable environment of moderately generous means-tested benefits. Historically, such benefits have been used as a safety net to catch a small number of people who have fallen through the system. Now, we are looking at a system that could be extensive enough to impact on people's lifetime savings patterns. The irony is that we are having to grapple with the behavioural consequences of the very consensus that we are trying to build, which will give people the certainty that they can plan on the basis of those means-tested benefits being available to them in retirement.
	This will be a key area of the debate, and the Government can help us in several ways: by giving a commitment to publishing the full range of outcomes of their modelling of the extent of future pension credit eligibility; by commissioning more work on the impact on savings behaviour of different levels of means-tested benefit eligibility; and by extrapolating beyond 2050 the projected outcomes for paid individuals.
	The Secretary of State said that 2050 was about the limit of his predictive power, but I put the following point to him. In the case of the low-paid earner used in the regulatory impact assessment, the assumption is that someone will have contributed for 52 years of continuous work. A person who is 16 in 2012, when the scheme starts, and who contributes for 52 years will be looking for an outcome in 2064. It is therefore essential that we project further forward so that people in that position can understand the likely scenario facing them. We also need to see a range of real world outcomes. The truth is that most people will not work for 52 years in unbroken employment. Many people who will be on the margins of the savings decisions will have broken work records, and will need to know whether saving will pay for them.
	It is legitimate to rely on auto-enrolment only if we are sure that we are auto-enrolling people into a scheme that leaves them better off by saving. The Conservatives would have serious misgivings about an auto-enrolment scheme that brought people into a savings system that would leave them less well off, or no better off, than they would have been had they not saved. We need to be confident that it is safe to recommend saving for the overwhelming majority of people, including those whose employment record is discontinuous. More will have to be done to demonstrate that that will be the case.
	Much of the public comment on the White Paper has focused on the changes to the state pension arrangements and the introduction of the auto-enrolled workplace savings scheme, but until very recently Britain had a first-class workplace pensions savings system. Changes in the environment, which I have already described, have greatly reduced that provision, and most commentators now accept that defined benefit schemes in the private sector are on the way to extinction; however, high-quality defined contribution schemes remain, with employer contributions well in excess of the 3 per cent. compulsory level proposed for the national pensions savings scheme. As the Secretary of State knows, there is a real risk that the introduction of the NPSS, or a similar scheme, will act as a catalyst not only of the final demise of defined benefit schemes, but of a downgrading of employer contributions to existing defined contribution schemes.
	The White Paper contains welcome provisions for a review of the regulatory environment surrounding occupational pension schemes. It is vital that that work be done soon and that the outputs from it are implemented well in advance of the introduction of an auto-enrolled scheme, because history will judge our putative consensus harshly if what we deliver is a pyrrhic victory, with a national pensions savings scheme that results in the downgrading of many people's employer pension contributions from higher levels to 3 per cent.

Philip Hammond: The policy solution is to create a more attractive regime for occupational pension schemes so that employers can see that such a scheme is to their benefit—that a more generous occupational pension arrangement works for them as a recruitment and retention tool. It would be helpful if, when he winds up, the Minister of State made clear the scope of the review of the regulatory environment. Some of his recent statements on the record have been slightly ambiguous, and it would be helpful to know how wide he expects the review to go.
	The Government have, rightly, signalled that the workplace savings scheme that they are introducing will be targeted primarily on median and lower earnings. We look forward to engaging with the Government in a debate over the summer on the potential benefits of such a scheme and the risks of an auto-enrolment model. The extent to which the Government should become involved in the delivery of a workplace savings scheme is not clear. The key debate—on the personal account system—is likely to revolve around the degree of state involvement, and thus the degree of personal responsibility and choice.
	The danger, which Lord Turner has spelt out recently, is that a high degree of Government involvement in the delivery system will be interpreted by users of the system as a Government guarantee of investment outcomes. I am sure that the Secretary of State would be as keen as we are to ensure that that does not happen.
	It would be useful if the Government could say what level of saving in the workplace saving scheme they would regard as a success. The White Paper implies an expected opt-out rate of about 38 per cent. The New Zealand Government are warning, in relation to the proposed Kiwi savers scheme, that opt-out rates could be as high as 75 per cent. The success of the auto-enrolled scheme will be a key measure of the success of the entire package. We must have a clear measure of what will count as success and what level of opt-out will trigger a review of the arrangements.
	No part of this reform package will work unless we restore trust in the pension system and public confidence in its fairness. Two broad issues must be addressed if public confidence is to be restored. The first is the Government's response to the ombudsman's report. Acceptance of the ombudsman's finding of maladministration would cost the Government nothing. The ombudsman is an officer of Parliament. She was put in place to adjudicate on claims of maladministration. It is unacceptable for the Govt to reject the finding that she has made. To do so is to challenge the right of Parliament to scrutinise the Executive and deliver judgment upon its activities.
	In response to the ombudsman's recommendations the Government have announced, as the Secretary of State said, an increase in the funds available for the financial assistance scheme. However, he knows very well that the benefits available under the scheme still fall far short of the demands of the pensions action group and of the recommendations of the ombudsman.

Jennifer Willott: Does the hon. Gentleman agree that there is a startling resemblance between the current occupational pensions saga with the ombudsman and the previous case about the state earnings-related pension scheme—SERPS—when the previous Administration were criticised by the ombudsman, also for maladministration and giving incomplete information? Does the hon. Gentleman agree that the only major difference is that with the previous case the Labour Government accepted the previous Conservative Government's maladministration, whereas in this instance they are refusing to accept anything at all?

David Taylor: Those people will not go away, including those in the BUSM scheme in Leicester, some of whom live in and near North-West Leicestershire. Does the hon. Gentleman agree that it is important to reach an agreement about what the costs of responding to the ombudsman's report would be? A figure of£15 billion cash has been suggested, with net present value down to between £2.9 billion and £3.7 billion—but even that does not take into account the fact that compensation would be taxable, which would take a good number of people out of means-tested benefits. Let us reach agreement about the costs before we start to dismiss some of the solutions that might be available. Does the hon. Gentleman agree with that?

John Hutton: May I once again put on the record my strong view that the figures are not bogus? The£15 billion was assembled in exactly the same way as we produced the costings for the financial assistance scheme in the first place. They are proper, actuarially based figures, and I dispute the hon. Gentleman's allegation that they are bogus, because that is fundamentally not the case. May I press him on something at which he has hinted, but not said? Is he saying from the Dispatch Box that he would compensate all those pensioners in full? He has criticised the Government for not making compensation available, but is it his policy to compensate them in full if he had the opportunity to do so in government—yes or no?

Terry Rooney: In recent weeks, the Work and Pensions Committee has taken evidence on the Pensions Commission report and the White Paper. I have attended far too many breakfasts, lunches and evening events. I have stopped eating, but the phrases keep going round in my head. We seemed to hear the same arguments time and again. Nevertheless, we were very grateful for the enormous number of submissions that we received. Not surprisingly, there were some very, very vested interests. Generally speaking, the employers' side was anti-compulsion and the TUC was anti any increase in the retirement age. One can understand the position that they are coming from, but the Secretary of State has made the case positively that this is a package of measures, and if one starts to unpick one bit, everything else unravels, and we need to be resilient in our arguments for the total package.
	I want to concentrate for a minute on the issue of the state retirement age, because at the moment, once one goes beyond 55, the economic activity rate plummets. It has been increasing in the last couple of years, which is partly down to the new deal for the over-50s, but at age 60, about 50 per cent. of the population are in economic activity. There must be a strengthening of training provision for the over-55s and of healthy workplace initiatives, and careers advice must be available. The general architecture must change—we need to start doing that now in preparation, because there is already a problem—to ensure that not only is the retirement age 68, but that people can work to that age and beyond if they wish. We need to ensure that they are physically capable and trained to take those employment opportunities. That participation rate must be a key indicator of the progress that we are making.
	Among all the submissions, most gratifying was the general agreement on the principles in the Pensions Commission report. The argument is around the architecture and the implementation. There was fairly unanimous support for the proposals around the state scheme, and I do not propose to dwell on them. The difficulties are around whether we call it a national pension savings scheme or personal account. This is a classic case—I am not looking for work—for a draft Bill. There are many areas of debate and discussion to be had on that, and that would help the case.
	The overwhelming message that comes through from all organisations is that there has to be simplicity and transparency in the scheme; primarily simplicity to reduce the cost. We had lots of argument over whether there should be 30 basis points or 50 basis points. We would settle for five. But if it is 50 basis points, as against 1.25 per cent. for stakeholders, that increases a person's pension pot by 20 per cent. That is what we should be looking at—the individual's pension pot at the end of the day. That should be the driving factor, not any submissions from vested interests. That is a key indicator that we should be looking at.
	In this initial round we must also consider key groups such as the low paid, those in multiple jobs, each of which may be paying less than £5,000, which would exclude them from the NPSS, but which cumulatively takes them over, and those with continuing health problems. There is a laudable target to get 1 million people who are currently receiving incapacity benefit into work, but how will their broken work records affect contributions into the scheme?
	There is also a huge issue, which I do not think that the White Paper addresses, around the self-employed. I am not blaming anybody, but they seem to have been left out of the debate by both sides of the House and by outside organisations. Around 7 million people are self-employed. They are probably the most under-pensioned group of all and I dare to suggest that they are probably a group with greater means for pensions than others, but I take it no further than that.

Terry Rooney: My hon. Friend is right, and as he speaks with the voice of the accountancy profession, I would expect nothing less. I will come on to the issue of manipulation by employers in few moments, if he will bear with me.
	The low paid, people with health problems and those with multiple employers all desperately need generic financial advice—not investment advice, but generic financial advice, particularly relating to their current debts and how best to manage them. It cannot be left to the bandit advertisements on television, which encourage people to roll up all their debts into one as a means of sorting out their problems and having money to spare. By and large, those are not good deals. Sadly, decisions have been taken recently about the funding of advice from citizens advice bureaux and similar organisations, which mean that it is no longer available. I suggest that that is not a good deal. We really need a network of generic financial advice made available to the low paid and underpaid to allow them to make wise choices. As I said, I do not mean investment advice, but generic financial advice.
	For the same reason and in line with keeping costs low, there needs to be a strong default option on the national pension savings scheme. As far as possible, we need to take the choice out of the equation. The greater the choice, the greater the need for advice, the greater the opportunity for mis-selling, the greater the complexity and the more costs increase. We also need to keep the scheme simple for employers. I have spoken to hundreds of employers over the last three or four months and they want no role at all in making any choices about the scheme for their employees. They want a simple scheme that allows them to deduct a certain amount of money every month, to send it off somewhere and to forget about it. Simplicity is important both for employer and employee.
	There are dangers with this sort of enrolment scheme and we need to be honest about them. Certain less-than-honest employers will seek to induce people not to take part in the scheme. I do not want to traduce anyone, but by and large, the smaller the employer, the greater the likelihood of that happening. There is no better policed system than the national minimum wage, but there are still issues about it. There are still far too many employers who do not pay the national minimum wage. If they are not willing to pay a wage of £5.05 an hour, it is likely to be a problem for them to contribute to the national pension savings scheme. We really need a strong regulatory role— [Interruption.] The hon. Member for Runnymede and Weybridge (Mr. Hammond) is turning up his nose, but I wonder whether he will turn up his nose in 30 or 40 years' time when people who have spent a lifetime working for an employer find themselves in poverty because they were forced out of the scheme.

Philip Hammond: I am wary of creating new regulators and having more regulation, but I entirely recognise his point. Surely the answer lies in the design of the scheme and the design of the opting-out system. That should help to deal with the few rogue and unscrupulous employers who encourage people not to participate in the scheme.

Terry Rooney: Without naming names, when a multinational company is willing to break the law on trade union recognition, a small employer will be more than happy to break the law to deny people their rights under the scheme. We need to be mindful and wary of that. I would be delighted if there were no need for regulation and every employer played ball, but, frankly, that is cloud cuckoo land. We need to ensure, in the early days, that anyone who plays that game gets hammered hard, thus serving as a warning to everyone else. The regulatory programme could then hopefully be disbanded. However, experience tells us otherwise.
	There is also a problem about the stage at which someone enters into a savings scheme. Some organisations say after six months whereas others say after one month. Nowadays, the standard is that someone starts a job on three months' trial. The end of that trial period is the logical time for someone to join the scheme. However, there is a difficulty.
	There is a connected problem. If individuals choose to opt out of the national pension savings scheme, they should receive standard generic advice on the consequences. Perhaps there should even be a cooling-off period for people to revise their decisions. The advantage of auto-enrolment is that it makes a decision for people. If they then exercise a different choice, it is fair and proper for the Government or somebody to point out the consequences and costs of their decision.
	We are considering a period of further consultation, especially on personal accounts. We are therefore in danger of individuals facing six years of inertia. It is possible to consult to death. It is interesting that, in Sweden, where a similar scheme was set up, the contributions were collected for four years before it was established. That made sure of identification and allocation. We need to be wary. Another six years of people avoiding decisions that they did not want to make in the first place is quite a slice of someone's working life, and of investment activity that is not happening.
	One of the commission's proposals, which the Government rightly rejected, was for an ongoing commission. I do not see the need for a continuing, fairly expensive quango that would have little to do for the next few years. It would be good if the Minister for Pensions Reform set out the review mechanisms that the Government anticipate in 10 or 15 years. I do not accept the need for a standing commission, but establishing the architecture of the review process would be helpful.

David Laws: The hon. Lady is right. She will have found, as many Members will have done, that although there was broad consensus in the House about pensions reform on the day of the Secretary of State's statement, pensioners throughout the country were much less enthusiastic when they heard about the proposals because many of them, longevity notwithstanding, may be gone by the time that some of the benefits of the proposals accrue.
	The Government maintained in the White Paper, on page 110, that the increase in the state pension age and the earnings link should be "inextricably linked", and yet it seems that we will legislate for higher state pension ages even without a firm date for the restoration of the earnings link. To many people, the reason for the uncertainty about the earnings link is unclear. The Chancellor and the Secretary of State have said that it is a fiscal and affordability issue. However, the point about the earnings link, which has been a matter of political debate for years in this country, is its cost in the future—in five, 10, 15 or 20 years.
	The Minister for Pensions Reform, who is in the Chamber today, was kind enough to answer a parliamentary question on the cost of restoring the link a few days ago. He indicated that that cost was £0.4 billion in the first year and £0.7 billion in the second year, so the amount of money that we will save through a delay in the pension age of one or two years is, in the context of the national accounts, peanuts. That is the amount of money that the Chancellor uses, in one of his great wheezes, in every Budget and pre-Budget report. If this is supposed to be a great reform, why is £0.4 billion or £0.7 billion now so vital? Why does that make it affordable or unaffordable? It makes no sense to us.
	What about the significance of the earnings link—and not just for the pensioners who are waiting for it be restored? When the Secretary of State responded to the hon. Member for Newcastle upon Tyne, Central(Jim Cousins) in the House on the day of the statement, he seemed to me to be saying that the earnings link and the new personal pension accounts, along with the national pensions saving scheme, would be contingent: that they would be introduced at the same time. That is confirmed in the House of Commons briefing paper, so if it is wrong, perhaps the Secretary of State will correct it. The clear implication was that if the earnings link were delayed, the NPSS could be delayed as well. As the Select Committee Chairman pointed out, we must wait six years in any event. I hope that if I am wrong the Secretary of State and the Minister for Pensions Reform will feel free to intervene. Otherwise, however, the delay has a double significance.

David Laws: I am fascinated to hear that. If the Minister looks at the  Hansard report, he will see that a clear commitment was given to the hon. Member for Newcastle upon Tyne, Central that the NPSS would not be introduced until the earnings link was restored. I hope that we have been given some reassurance today, although I fear that the hon. Member for Newcastle upon Tyne, Central will not be very pleased to hear what has been said. The Government have not made the case for a delay in the earnings link and I hope that we shall return to that when we consider the legislation. As the Minister can read in  Hansard, the hon. Member for Newcastle upon Tyne, Central said on the day of the statement
	"I hope there will be no attempt to cherry-pick Turner so that the personal savings scheme starts in 2012 and the earnings link does not. Will my right hon. Friend assure us that the two dates will be coupled... ?"—[ Official Report, 25 May 2006; Vol. 446,c. 1659-60.]
	The Secretary of State's answer was simply "Yes."
	Will the Minister clarify another issue relating to the earnings link? Although it may seem to affect only a small number of pensioners, it is hugely important to a growing proportion of the pensioner population. As the Minister will know, about 1 million pensioners out of a total of about 11 million live abroad. At present, the pensions of half of those people are linked to prices, while half receive no uplift each year even in relation to prices. Does the Minister intend to uprate in relation to earnings the pensions of those who currently receive the prices uplift? If so, the current unjust difference between the pensions of those living in different countries will widen significantly in the future. If the Minister already has a clear view, we should be grateful to hear it.
	In his helpful speech, the hon. Member for Bradford, North identified many concerns about the NPSS and the personal accounts. I have already said that I hope that there will be close co-operation between all the parties in the framing of the scheme. There are numerous risks. There is, indeed, a risk the people will perceive the risk itself as Government-backed, and against the thrust of the proposal for personal pensions that do not rely on the Government.
	There is also the fundamental issue—mentioned by the hon. Member for Runnymede and Weybridge—of means-testing. On page 105 of the White Paper, the Government say:
	"Problems with incentives could... develop if a pensions system evolved in which a significant majority of pensioners were entitled to Pension Credit in the long term."
	We know that that was very carefully written, and we know that the Government now aspire to cap the extent of means-testing at 50 per cent. at the highest, and think that they can push that down to below 30 per cent. However, there is also much doubt about the nature of those figures, notwithstanding the changes that have been made to savings credit.
	I repeat the request by the Conservative spokesman that the Government should look closely at the modelling on the number of pensioners in means-testing and that if people come up with other, perhaps more realistic assumptions, the Government will run them through their model. Surely the point is that even if the Minister is successful in reducing the number being means-tested to below 50 or 40 per cent., many of those individuals are those least likely to save. In other words, the 30 or 40 per cent. of people we are talking about will be those who will have to make difficult decisions about whether to save. We do not care about the top 10, 20 or 30 per cent. because we know that they will save anyway and, indeed—as several hon. Members have pointed out—there are already generous incentives for them to do so.
	The 30 or 40 per cent. we are talking about will have to make a difficult choice, but they are the very people who are already struggling financially, as Labour Members well know. Those people may be borrowing money at very high rates of interest from mortgage companies or on credit cards in the struggle to purchase a home. They have many other things to do with their scarce earnings. Some will not receive any employer contributions, as the Select Committee Chairman mentioned. Others will see all the employer contributions wiped out by means-testing. I seriously doubt whether many of those people will choose to save in a scheme of this type, especially as I do not think that they will easily understand the risks. Therefore, the auto-enrolment aspect—also mentioned by the Chairman of the Select Committee, in what was a very interesting contribution—is crucial to ensuring that huge numbers do not simply opt out.
	The issue of means-testing is not just how high we can get the basic state pension, or its affordability or its simplicity—it is also fundamental to the whole thrust of what the Government are trying to achieve.

Frank Field: I want to thank my right hon. Friend the Secretary of State on two counts. First, our life expectancy has risen by 30 minutes or more since the debate started. If his calculation is correct, it enables us to understand why there is such a crisis facing pensions funding.
	Secondly, I thank my right hon. Friend for reminding the House of the success of the pension credit scheme. This Government have redistributed more resources to the poorest pensioners than any Government since 1948, and the only sadness is that he has had to remind some Labour Members of the Government's success in that regard. However, we know that the pension credit scheme, as currently constituted, cannot last in the longer term. That is why we need to debate the proposed reforms, and I want to raise three matters that will break up the consensus that has held sway since my life expectancy was extended by 30 minutes a short time ago.
	My first point has to do with the Government's approach to consensus. A sort of Judy Garland approach has taken over the contributions to the debate so far. The feeling appears to be that, if we just hold hands, we can tiptoe more quickly to the end of the rainbow and the great prize that is a political consensus.
	I do not want to knock the importance of the House of Commons, but we do not play much of a part in the formation of consensus. That is formed by the people of this country—our voters. The last time that we thought we were so clever as to create a consensus was in respect of SERPS. It lasted all of five years, and I wonder whether the Government's tax-financed pension proposals, as opposed to an investment-led approach, will last even that long.
	The choice being given to the electorate is to support the Government issuing some more IOUs for pension reform. They will not be paid now, but are to be redeemed by taxpayers in the future. However, Governments have issued such IOUs in the past, and we all know that they have not been so redeemed. The only consensus in this country since 1948 has been in favour of a modest basic state pension. In the early days, it was not linked to anything, although the subsequent link to prices has remained in place. So there is a sombre note for us. It is fine for us to talk in wonderful glowing terms about what we shall create and the consensus that will enforce it, but if we rely on a tax-financed model that consensus will not last long.
	My first disappointment in the Government is that given the success of pension credit, and that for the first time they have managed to buy time when they have not also had to deal with reforms to help today's poor pensioners, we chose the old tax-financed approach instead of building up rafts of investments. If we had adopted the investment-led approach, no politician would advocate changing the consensus. If one of us did, our colleagues would quickly drag us to the political knacker's yard where we could safely be put out of our misery and our constituents' pension investments would be left intact. That is my first note of caution.
	Secondly, although the phrase "auto-enrolment" flows easily off the tongue, the Government are really introducing a toxic element in our occupational pension provision. There are already major changes because employers want to cut the costs of their pension commitments, and in the auto-enrolment proposals the Government's natural wish to establish a floor will quickly become the ceiling. Employers who are paying between 15 and40 per cent. of wages costs to occupational pension schemes could quickly decide to embrace the Government's approach to auto-enrolment to reduce significantly their contributions to such schemes.

John Butterfill: I do not often disagree fundamentally with the right hon. Member for Birkenhead (Mr. Field), but I do on this issue, because I think that the Government are fundamentally right in what they are putting forward in response to Turner. Although it has lots of things that need tidying up and clarifying, the proposed scheme will be for the benefit of the nation as a whole. However, he was right to point out the damage that has been done by the Government's refusal to acknowledge the findings of the ombudsman's report, which is sad. Perhaps that is one of the reasons why Scottish Widows announced today that voluntary pension saving for personal pensions has fallen in the past 12 months by no less than 10 per cent. That flags up the urgency of doing something about the issue. It also emphasises that the Government cannot have it both ways: they cannot appoint an ombudsman and then completely disregard the ombudsman's recommendations.
	There are ways in which the Government's proposals can be improved. What the Government propose—particularly delaying the link with earnings until 2012—is pretty unsatisfactory. At the moment, we have a group of people in this country who are the main recipients of pension credit. I am talking about the very elderly—the people born before 1930, who are already in their late 70s and will be in their late 80s by the time the Government's proposals come into effect. They represent—probably predominately—the very poorest in our society. Not all of them are very poor, but I am talking about the majority. We should do something now for those people. We should say that those born before 1930 should have a higher pension than the rest of us, although that should not roll on to people born before 1931 and people born before 1932. We should recognise that that generation grew up in a war period or an immediate post-war austerity period and were not able to make the same pension savings that most of us have been able to make. By recognising those people's needs with a special pension, we could reduce considerably the bill for pension credit and help the whole process to go forward.
	Equally, we could introduce measures that would enable us to reintroduce the earnings link sooner than the Government propose. The Government were right to go a little further than Turner and bring forward the age extension that he proposed, so I congratulate them. The scale of change to the pension age that was suggested by Lord Turner was rather conservative, although he was largely motivated by the need to integrate the retirement ages of men and women. However, there is scope to make the change more rapidly still. We will wait too long if everything is ultimately left until 2050, so we could compress the process further and thus bring in more money to allow the earlier establishment of the earnings link.
	We must also persuade the rest of the public sector to follow the example of the House. On 3 November 2004, the House voted to end Members' right to retire at 60 without any reduction in pension. That will apply from 2009, rather than 2013, which is the date proposed for the rest of the public sector. I know that such a change will be painful, but the House has already voted for it. We thought that by setting an example, we might strengthen the Government's hand when trying to convince the remainder of the public sector that such a change was necessary. It would not mean that people would have to work much longer. However, if people choose to retire earlier, there is inevitably a cost. If people live longer, the cost to taxpayers is much higher.
	Such measures would enable us to do more—and do so earlier—for those who are most needy. They would create a greater prospect of not needing to move endlessly towards putting more and more people on means-tested benefits. As the right hon. Member for Birkenhead said, that has to end eventually because we cannot continue on that road indefinitely.
	I agreed with some of what the right hon. Gentleman said about the scheme that the Government are proposing. If we have a complex scheme with many investment choices, there might be a danger of mis-selling. The scheme is aimed predominantly at those who are not very high earners. Those high earners can afford to take the gamble of going for risky investments because if everything falls down, they will still have enough to live on. However, ordinary working people do not have that luxury, so they need a guarantee that they will be saving in a safe vehicle. I thus respectfully suggest to the Government that there should be a single investment pot from which everyone in the national pension savings scheme would draw their pension.
	We could have a large number of investment advisers. The Government should use expertise in the private sector and encourage bids for the right to be an investment adviser. Such a process would be competitive. It would keep people on their toes, and those who did not perform well would get the sack, which might allow others to get a job. That would maximise the return to the NPSS and its beneficiaries.
	I do not think that the Government have quite decided whether there will be a single scheme or multiple schemes. I hope that they do not envisage having multiple schemes because the examples from countries that have done so are not especially edifying. Anyone who worries about such matters should consider the experience in Australia, where there was massive mis-selling and an awful lot of suspect activity. No one wants that, so we should have a single provider with multiple advisers.
	The resources of the private sector could be used in the administration of the scheme. There is massive expertise in the pensions and insurance sector, and that sector also has existing computer systems that work. No one wants the Government to set up yet another major public sector computer scheme because they have not yet found one system that works properly. One only has to look at the Child Support Agency to find real evidence of what can happen.
	We would be mad to try to set up a new scheme when there is plenty of expertise outside the public sector, but given what can be done, there is a genuine prospect of us being able to create something very worth while. However, I reiterate that, as the right hon. Member for Birkenhead said, there is a danger that the floor will also become the ceiling. We therefore need to encourage the private sector to continue to offer pension saving for its employees. The only way we can do that is by giving it some incentive, and I hope that the Government will see that to do so would be an act of enlightened self-interest.

Sandra Osborne: I agree that it is alleged that the80 per cent.—in common with the other percentages that I have quoted—is not 80 per cent. of 100 per cent. of what such people would have received. I am raising that matter to seek clarification from the Minister.

Sandra Osborne: I am aware that there are genuine difficulties in identifying all those who are eligible for the scheme, but that would be the case whatever scheme the Government—any Government—introduced. But I do believe that the Government are taking steps to try to improve the scheme's efficiency. The number of people being paid has increased significantly, but I agree that there is a problem and I encourage the Minister to look at it.
	I recognise that the Government have made significant progress in providing assistance, but as we all know and as we are discussing today, serious gaps remain. For example, it is perfectly possible for someone who started in a scheme at the age of 21 and who is now 45 to get nothing, even though they have paid in for 20 to 25 years. The Government have made it clear that the financial assistance scheme is not a compensation scheme and that they do not accept liability; the money has been targeted at those closest to retirement. It is certainly true that those closest to retirement will be in the most difficulty, because they have no time to make up the shortfall. But we all know that it will also be difficult for those aged 45 and over to make up the years that they have lost—years for which, in any case, they paid for through deferred wages. They have already paid that money and they feel very strongly that they are entitled to a return on it.
	The Minister for Pensions Reform said in last week's Westminster Hall debate that of the 125,000 people affected, about a third would qualify for the scheme, a third would not qualify because their loss was less than £520 a year, and a further third would not qualify because they are not within 15 years of retirement. Of course, there is also a sliding scale even for the third who will qualify. The Minister has been very candid about the reasons why the arrangement has been made in this way. The scheme is cash-limited, and although the Government have been able to extend it significantly, which we all welcome, the amount available is not sufficient for all 125,000 people. The money has therefore been targeted in the way that the Minister felt most appropriate to meet the greatest need, which is perhaps understandable. But the crux of the matter is that a difference of opinion exists as to whether these workers have been treated unfairly and are entitled to redress, or whether they are entitled simply to assistance, welcome though that may be.
	Long before the ombudsman reported, there was a strong view—certainly among Labour Back Benchers—that an injustice had been done, and calls were made for the Government to correct it. Successive Secretaries of State, pensions Ministers and even the Prime Minister have recognised the plight of these workers, and the will has been there to do something. It was repeatedly stated that a pension promised should be a pension paid. How much would it cost to keep that promise?
	It is clear from today's debate that there are differences of opinion on how much it would cost to implement the ombudsman's recommendations. The Minister said that it was valid to consider future costs according to a net present value calculation, which produces a figure of some £3 billion—not that much more than the Government are already putting in. However, the Government have calculated that the figure is between £13 and £17 billion in cash terms, which is the normal way that they express such figures. This is not a question of anybody being conned or of a lack of transparency, and it is very unhelpful to describe the situation in that way.
	I am not an economist, as is probably fairly obvious—nor are most of the people who have lost their pensions. To a lay person, there is a very big difference between the figures that have been bandied about, and further explanation of them is required. For example, it has been said that £25 billion might need to be spent to replace Trident. That seems like a lot of money, but so does the £17 billion required for this proposal. Where does such a figure fit into the overall scheme of things? These differences in the figures are adding to people's frustrations; we need more clarification. Will the Minister agree to meet my constituents and me to discuss them in detail?
	Of course, the official Opposition have never at any stage in this debate, which has been going on for four or five years, committed themselves to spending public money to resolve this issue.

James Purnell: But is my hon. Friend aware that those unclaimed assets are not the Government's money? It is obviously up to the financial services industry to decide how to spend that money, and it has kindly come forward and said that some of it should be spent on community facilities. But even if all that money were spent on the cause that the Opposition mentioned, it would be nowhere near the amount implied by the £3 billion, or £15 billion, figure. It would amount to barely a few hundred million pounds—even if it were our money to spend, which it is not.

Robert Syms: This is an important debate. I suspect that security in old age is one of the most important issues that the political parties will argue about over the next few decades. Some 40 per cent. of my constituents are pensioners, and it always surprises me when, as often happens, an elderly individual comes to my constituency surgery to talk about their mother or father, who must be even more elderly. We all appreciate that longevity is a growing issue, and people's understanding of its impact on the pension system is becoming much clearer than it was perhaps five or 10 years ago.
	In future, the rest of the country may well catch Poole up. By 2050, there will be 50 per cent. more pensioners, and the ratio of workers to pensioners will halve. So we have to get this right and not only provide security in old age for those who retire, but ensure that the burdens on the working population do not become so great that we as a nation are no longer competitive in the world economy.
	There is a problem, in that, as has already been said today, well in excess of 9 million people are not saving enough for their pension. We have heard that there is a particular problem with one category of person—the self-employed. We also know that there has been tremendous loss of confidence in the pensions industry, which is informing the decisions that people are making today. It is evident that if people have surplus cash they buy a piece of property rather than investing the money in a pension fund, because the experience of friends, neighbours and sometimes family are such that they are put off. The fundamental test of the White Paper, the direction of travel and the recommendations that the Government are making is whether they increase confidence in the pensions system.
	It seems to me that a number of problems have brought us to the present position; the first is longevity. Some of the accounting rules may have forced companies to take decisions to close schemes prematurely, and the regulatory regime has sometimes led to illogical investment decisions. As my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) said, the changes that the Chancellor made to the advance corporation tax regulations in 1997 have had a major impact on pension fund operations. It has been said that the Treasurygot £7 billion per annum from a capital value of£170 billion, and I think that all hon. Members would acknowledge that that has made a massive difference to the economics of pension funds. I am glad that the Government are now examining pensions, but I suspect that, as many of my hon. Friends, including my hon. Friend the Member for Bournemouth, West (Sir John Butterfill) predicted when that change was made, it has caused long-term problems.
	I am sure that the increase in pension credit has helped many of the poorest pensioners, but as the Secretary of State said, if the predictions that nearly70 per cent. of pensioners will be in receipt of the credit are accurate, not only will that not be sustainable, but it will be a major disincentive to people continuing to save. What we have to do, in addition to setting up a sensible pensions system, is to reinforce people's good intentions to save money for all the eventualities of retirement. Unfortunately, predictions that pension credit will be paid to as many as 70 per cent. of pensioners are a major disincentive to saving.
	I agree with my hon. Friends about the direction of travel. We have to have a consensus because during the period that we are debating there will, no doubt, be changes of Government. It is tremendously important to get Government and Opposition parties signed up to approximately what is decided.
	I shall not go into the detail of the White Paper—it is extremely technical and many hon. Members have a greater understanding of its provisions than I—but I do wish to welcome some of the proposals. All hon. Members know that women, particularly those who stay at home, have not been well treated by our present pensions system. The White Paper's acknowledgement of that, and the reduction in the number of years needed to qualify in terms of national insurance, are to be welcomed. I also welcome the strengthening of provision for carers, which has already been mentioned. A person who gives up work to look after a loved one, a relative or a neighbour probably saves the state thousands of pounds, and it is wrong to disadvantage such people in terms of their pension claim. I am glad that the Government have made proposals that will plug that gap.
	It is inevitable that the pension age will increase. The proposals in that respect are sensible, but there are associated issues relating to joined-up government. Some of my constituents find it difficult to stay in work because they cannot get the operations that they need. We need a national health service that is responsive to people who develop problems as they age and who want to continue to work, but who now sometimes do not have that choice. In addition, the only way that some people will be able to continue in work until they are 67 or 68 is by changing jobs or careers, so training throughout life will be terribly important. The proposals cannot be seen in isolation; they must be seen as part of a package.
	It is extraordinary that as we are talking about increasing the retirement age, the Government have agreed that the retirement age in much of the public sector will remain at 60. I agree that many people who work in the public sector, particularly in local government, are not well paid, but it is extraordinary to design a system in which the retirement age is 60 for one category of worker but 67 or 68 for another.

Robert Syms: I agree that it is sensible to honour contracts entered into, but we are talking about the agreement negotiated by the Government extending over the next 20 to 40 years. A change suggested in the White Paper is being phased in and I see no reason why we should not consider phasing in a different retirement age in some of the public sector schemes.
	To return to the point I made at the beginning of my speech, the Treasury pulling in more money because of the changes to ACT and corporation tax has had an impact, particularly on local government pension schemes. We all know that our local authorities are having to deal with shortfalls, the burden of which inevitably falls on council tax payers. There is an issue—I put it no higher than that, and I have no magic solution. There is a perception of unfairness, and on behalf of the Conservative party my hon. Friend the Member for Runnymede and Weybridge has set out certain tests that we wish to be applied to the White Paper. Those tests are pension dignity, fairness, affordability, personal responsibility, simplicity and transparency. We shall scrutinise the Government's proposals and test them against those yardsticks.
	It is important that we restore confidence in the industry and that will not be possible unless we deal with some of the perceptions of what has gone wrong in the past which have been brought to our attention via our postbag and e-mail. We have all had vast amounts of correspondence with people who have suffered because of the Equitable Life affair, and we are all aware of how aggrieved people feel following the parliamentary ombudsman's report on occupational pensions. We are now starting to get more hard facts, and I hope that the Government will take up our suggestion of using unclaimed assets. We have figures of £2.9 billion to £3.7 billion and annual costs of perhaps £100 million to £150 million to deal with the problem.
	Many people who have been severely affected are in no position to repair the damage done to their occupational pension. If a person who is still working, with many years to go before retirement, gets a knock, they might be able to put it right, but someone who is in the last few years of work whose expectation of a particular deal has been lost is in a very different position. Some of these schemes included rights for widows or husbands. It is important to note that some people may go home having lost a pension and some of the security, for example that a husband would have left his wife. One of my constituents, David Cull, e-mailed me the other day. He has possibly lost £15,000 in pension. It was to be index linked and included decent provisions for his wife in the event of his death. He feels aggrieved about that. I hope that the Government will revisit this issue because Members on both sides of the House will feel that there is a degree of unfairness.
	We have heard about the financial assistance scheme. Its scope has been widened. I suspect, as is the nature of things, with pressures from parliamentarians, that its scope will be widened still further. There is a legitimate issue of how quickly it will address some of those who accept redress from it. I hope that the Government will examine that carefully.
	I am glad that the Government have produced the White Paper. There are some good things in it. I hope that there is a consensus. I hope that we can set up a scheme that this country can be proud of in the future. However, there is some unfinished business for those who feel that they have been misled, particularly those who had an expectation of different things. If we leave such issues to fester, we will end up with a lack of confidence in the pension system and people will still be putting their money into second homes or into investments because they do not trust the pension system.

Anne Begg: I think that we all come into Parliament with the intention of making a difference. I genuinely believe that since 1997 the Labour Government have made a difference to today's pensioners. We have already heard tributes paid by hon. Members on both sides of the House, remarkably, to the pension credit scheme, and the difference that that has made to the poorest pensioners, especially women. We have the winter fuel allowance, free travel and free televisions licences for the over-75s. In Scotland, there is free help with heating for those who have older houses or houses without central heating. We have done a great deal for today's pensioners.
	Every so often, however, there is a chance in our lives as politicians to change the lives of future generations. The legislation that will come from the White Paper will do just that. The White Paper is not about today's pensioners. I can understand that when something is called a pensions White Paper or a pensions commission the people to whom we turn immediately for an opinion are those who are presently pensioners. However, they will not be the ones to enrol in the national pension savings scheme. They are not the ones who might have to work longer to make the scheme pay. Current female pensioners will not benefit from the changes in accrual rights for national insurance credits. They have already retired. So, by its very nature, the White Paper is not aimed at today's pensioners. It is aimed instead at ensuring that we have a structure and a basis for future pensioners so that they can also enjoy the benefits of the country's prosperity.
	There are bold aspirations in both the Turner proposals and in the White Paper. I hope that for the first time we are bringing together political parties from both sides of the House and, as my right hon. Friend the Member for Birkenhead (Mr. Field) said, the public as well into a consensus on how we move forward and how we will build for the future on what we have now.
	We have come quite a long way. I was on the Select Committee on Work and Pensions for all of the previous Parliament and have been on the same Committee for slightly more than a year during this Parliament. I feel as if I have been living with the proposals from the various Turner commission reports for a long time, but not, I suspect, for quite as long as is felt by Lord Turner and his two fellow commission members. Perhaps it is worth reflecting on Opposition Members' attitude at the time. That might illustrate how we have come quite a long way.
	The setting up of the Turner commission was greeted with a great deal of scepticism. Opposition Members thought that the Government were trying to avoid the issue by putting it out into the long grass and that when the commission reported, the Government would bury the report. That was probably the general feeling among Opposition Members. In fact, the Government have not buried the report, and the level of consensus that we have already seen during today's debate suggests that we have come quite a long way.
	I was disappointed by the amendment tabled by the Scottish National party. Its tone is somewhat sour. That is not the tone of the Conservative amendment or that of the Liberal Democrats—I am not normally nice to the Liberals.

John Penrose: I agree that lack of public trust in the pensions system is one of the biggest problems thatwe face, and a degree of external comment by acknowledged experts might very well help build up trust. It is crucial to remember that if we believe that the proposals in the White Paper are worthwhile—there is a fair degree of unanimity on many aspects—valuable, and should stand the test of time, let us not sell them short. Let us instead build in stability, durability and mechanisms to ensure that they last, rather than simply trusting to hope.

Russell Brown: It is a pleasure to follow the hon. Member for Weston-super-Mare (John Penrose). I say that because those who can speak in this Chamber without notes are to be admired. I hope to be here until I am of pensionable age, and perhaps can match that on one occasion at least.
	The pensions issue has an impact on almost every household and is of importance to today's pensioners. The White Paper, "Security in retirement: towards a new pensions system" is very much about looking to the future and the pensioners of tomorrow. I hope that the whole House would agree on two aspects of pensions provision. The hon. Member for Weston-super-Mare mentioned one of them—the sustainability of anything that we introduce into the pensions system. It must be sustainable, as Members would not be prepared to accept the option of going back to the levels of pensioner poverty that this country has witnessed in the past.
	Equally, on the second aspect, Members have referred to what the Government have done for today's pensioners. There was much to be admired in the introduction of the minimum income guarantee, followed by the pension credit and the savings credit. Like many other Members, I have met pensioner groups in my constituency. In all fairness, we get some stick about what the Government have done, but many people in my constituency—people from a solid trade union background and people with roughly the same political leanings as myself—do not always recognise how redistributive the Government were in what they did for the poorest pensioners. Nevertheless, although we have done some positive things, I always admit that there remains much more to do.
	I want to reflect on what has brought us to the current stage of unrest, uncertainty and disappointment. Occupational or works pensions are one important issue, and how some companies reached their current position is another. A significant number of final salary pension schemes have been closed. Speaking as one who worked for 23 years with a multinational company—or rather I was employed for 23 years, as working and being employed by a company are two different things—I witnessed what happened when it wanted to reduce its numbers. Of course, the big advantage was a good redundancy package, but an additional carrot was access to a pension scheme. The company I was employed by was not alone, as it happened right across the country during the 80s and early 90s. When people get early access to a pension scheme and people are living longer, it undoubtedly puts pressure on the schemes.
	I have to say that the same thing happened in the public sector. As a councillor for 11 years during the days of Mrs. Thatcher, I experienced the squeeze on local government spending in the late 80s and early 90s, which was also pursued by her successor, John Major. Council departments across the country were asked to reduce numbers, but those who decided to leave were the people on high salaries with big pensions. Pension funds cannot sustain the sort of numbers that we saw moving out of the public sector, especially local government, over those years.
	The Government are trying to put a message across about the importance of preparing and saving for old age. I regret to say that some of today's pensioners send out the wrong message at our surgeries, although I understand why they feel angry. Irate pensioners sometimes complain about the couple down the road, neither of whom work and who are in receipt of pension credit, getting exactly the same money or perhaps even more than they do. The big argument then is whether it is worth saving for old age. The answer has to go out loud and clear from this Government from this Chamber that it is indeed right to prepare for old age.
	The country is witnessing a significant demographic shift like never before. In my constituency of Dumfries and Galloway, it is projected that about 4,000 or 5,000 jobs will not be filled between 2012 and 2015, simply because people are growing older and more people are retiring in the area, while at the same time many young people are leaving the locality due to the lack of decent, well paid jobs.
	That brings me to my first point about the White Paper. I represent a part of the country that is recognised as having a low wage economy. I believe that, had it not been for the introduction of the national minimum wage, we would still have wages of about £4 an hour in my area. The minimum wage has made a difference, but it is still very much a low wage economy. I applaud the concept of a national pension savings scheme—or personal accounts, as they are called in the White Paper—but we must not forget those on low incomes. We really need to deal with the issue of how to get over some of the problems of low earners. The most obvious barrier to saving for many people is poverty and low income, as they have to think about the necessities and essential spending. Saving for retirement is not an option for those people.
	More than half of all the households identified by the National Association of Citizens Advice Bureaux as having serious debts have incomes of less than £7,500 a year. More than 12 million people—about43 per cent. of the working population—are not saving enough in a private pension for their retirement. That figure is on the rise; it was only 36 per cent. in 2003. Currently, an estimated 7.5 million people are not saving at all and just under 5 million save only small amounts. Those on the lowest incomes—less than £15,000 a year—account for 3 million of those who are not saving at all. If personal accounts are to succeed for all employees, they will have to provide the guarantee of a state-backed pension scheme, so employers must contribute. Lord Turner's report set out a model, but it would have been preferable if the Government had come out in its favour.
	I have been a trade unionist for more than 30 years, so the Minister will not be surprised to hear that I greatly agree with the position of the TUC, which emphasises that a good scheme definitely needs to meet a number of criteria. Costs must be kept to a minimum, which can be done only through a simple system that minimises regulatory advice and marketing costs. There must be a simple default option available to all and it must make sense for the vast majority of NPSS savers. There must be other choices, but it is important to have a straightforward lifestyle option. Savers should have their own pot and should feel that it belongs to them. They should have representation in scheme administration and stewardship, as with trustee stakeholders. Employers should not choose NPSS suppliers for their staff as there are too many opportunities for mis-selling and it is a burden that employers do not want, although employers are free to do better with their own schemes.

Russell Brown: Yes, that will go on the record and I hope that any employers taking an interest in today's debate will hear what my hon. Friend says. Any system must be able to cope with workers who frequently change their jobs and, of course, with disorganised, short-lived employers, as they are often called.
	I have already briefly mentioned the issue of demographic shift, as it impacts on my own area. The figures show that when the state pension was introduced, there was one pensioner for every 14 employees. Today, there is one pensioner for only four employees. I therefore understand the reasoning behind raising the retirement age over time. However, we must acknowledge that longevity is not equal throughout the country. My hon. Friend the Member for Aberdeen, South (Miss Begg) referred to that.
	Extended life expectancy, which is good news in some parts of the country, is not experienced in many others. I know from conversations with colleagues from Glasgow and other industrial heartlands that three score years and 10 is not an option for many of their constituents. Admittedly, lifestyle has something to do with not only early retirement on the ground of ill health, but early departure from this world.
	My hon. Friend the Member for Bradford, North (Mr. Rooney), the Chairman of the Select Committee, was right to discuss what people would do in their mid to late 50s and beyond. There needs to be a general change in attitude and understanding of how those in the latter years of their working lives will be best employed. That will mean retraining and ensuring that opportunities exist for people.
	The White Paper contained announcements for carers and women. The Department has carried out research that demonstrates that pensions are not high among women's priorities, but that, thankfully, that will change. Women tend to be more concerned about their families' short to medium-term needs than saving for their future, and feel that their partner should or will provide for their retirement. They rarely think of pensions when making child-related employment choices, and few would have made different life choices if they had considered their future financial position. I worry even now when I watch programmes and witness young people, especially women—some are in their mid to late 30s and are professional people—who openly admit that they have made no attempt to provide for their retirement. It worries me when people of that age group who work in the City and who, one would think, know better, have made no provision.
	The word "consensus" is bandied about the Chamber too often. When I came into the Chamber earlier, one of my colleagues said that I had a weakness in that I made rash judgments about the Opposition. If that is my only weakness, I am delighted. However, I worry that "consensus" trips off the tongue nicely, and has done so more often since the main Opposition party appointed a new leader towards the end of last year. For me, the jury is still out on whether we will reach consensus in the Chamber on the issue that we are considering, or any other.
	When we discussed the recent ombudsman's report, the hon. Member for Runnymede and Weybridge(Mr. Hammond), when pressed by the Secretary of State about what he would do about it, refused to give a commitment and merely said that he would look to the future. Yet the hon. Member for Eastbourne (Mr. Waterson) said in response to my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) that the Conservative party would consider unclaimed assets to deal with the matter. I believed that two Front Benchers would have given the same answer to the same question.
	Consensus is needed, but perhaps not political consensus in the Chamber and the other place. Consensus is needed in the country because what we determine will affect everyone's future and we therefore need to carry people with us. We do not need some sort of consensus that is discussed here, but does nothing more than blur the edges and allow people to say that we are all the same in any case. We are not all the same, and the White Paper is a genuine starting point for the future of the pensioners of tomorrow.

Michael Weir: As the hon. Member for Dumfries and Galloway (Mr. Brown) said, the word "consensus" has floated around the Chamber today. However, the Government's view appears to be, "There will be consensus about our proposals or nothing." That is the wrong place to start because there are differing views about the future of pensions.
	We in the Scottish National Party and Plaid Cymru believe that the Government have flunked a golden opportunity to tackle the perceived problems of the state pension system. Although we talk about consensus, the right hon. Member for Birkenhead (Mr. Field) was correct to say that there had to be consensus outwith the House. The consensus there, certainly among the people to whom I speak, emerged around the idea of a citizens pension, although views vary about the form that it should take.
	As has been said, the White Paper does nothing for current pensioners. Earlier, the Minister for Pensions Reform argued that the proposals are about the future, not the present. The hon. Member for Aberdeen, South (Miss Begg) also referred to that. I take that on board to some extent but, unless we tackle the genuine concerns of today's pensioners, we are unlikely to achieve consensus. As the hon. Member for Runnymede and Weybridge (Mr. Hammond) said when he spoke about the problems with occupational pensions, the genuine grievances of some people and the fact that we continue to hear stories about the matter means that we will never get past that issue. The same applies to the state pension. If today's pensioners feel strongly that their problems are not being taken on board, the same process will happen. Indeed, the National Pensioners Convention has already made the point that the White Paper does nothing for today's pensioners and I understand that it will publish an alternative White Paper next week.
	As I said, we greatly support a citizens pension, which we were the first to advocate, although others subsequently took up the idea. I suspect that we may be the last ones standing who continue to talk about it, given that the hon. Member for Yeovil (Mr. Laws) did not mention it. When the Turner report was published, initial reaction was that it advocated moves towards a citizens pension. However, on closer reading, it became clear that it did not take us very far down that road. Turner's gradual approach meant that many years would pass before most people received a citizens pension.
	Inadequate though those proposals are, the Government's proposals do not even go that far. As I said in an intervention on the hon. Member for Aberdeen, South, the White Paper contains proposals that we greatly support and I shall enumerate some later if I have time. However, I want to consider the point that has been made repeatedly about the restoration of the link between pensions and earnings in 2012. That has been the spin on the White Paper since its publication, but I ask hon. Members to read its contents carefully.
	The executive summary on page 17 states:
	"During the next Parliament, we will re-link the uprating of the basic State Pension to average earnings. Our objective, subject to affordability and the fiscal position, is to do this in 2012, but in any event by the end of the Parliament at the latest. We will make a statement on the precise date at the beginning of the next Parliament."
	That could have been framed on Sir Humphrey Appleby's office wall. It is not even jam tomorrow, but a statement that, if we have a good raspberry harvest and sugar remains at a low price, we might perhaps just find it possible to have some jam, but we will not say when. Hon. Members should note that the date on which the Government will make an announcement is nicely past the next general election. That does not give much succour to pensioners. Even if the Government implement that statement—I shall not dignify it by calling it a promise—it could be as late as 2015, not 2012. That is presuming that they win the next general election—they will not in Scotland but I cannot speak for England.
	Even if the Government were to re-establish the link, it would do nothing to address the fact that pensions have fallen behind earnings since the Tories broke the link or to make up for the past 25 years, which is why a true citizens pensions is the correct way to deal with the matter.

Michael Weir: The hon. Lady will find out soon enough.
	Two years ago, we published our own paper, "A secure retirement for all", in which we set out our proposals for a citizens pension and the reasons why we believed that it was the correct way forward. Those reasons have not changed, and our solution remains the best way forward.
	Despite what has been said about all that has been done for pensioners, far too many of our pensioners continue to live in poverty. The hon. Member for Aberdeen, South has mentioned many things that the Government have done for pensioners, and she specifically referred to the winter fuel allowance, but to put it into perspective, last week Scottish Power put up its charges by between 10 to 17 per cent., depending on the package, which is the third increase in a year. That one increase put up the average bill for a Scottish Power consumer to £131, which puts the £200 winter fuel allowance into perspective. The Scottish Executive have made good strides forward with their central heating scheme, but a central heating scheme is not much good if people are frightened to turn on the gas to use their central heating. Furthermore, many rural areas of Scotland are not connected to the gas main, so the central heating scheme does not do a great deal for people who live in those areas.
	The current pensions system is based on labour market participation, the effect of which is to translate poverty during working lives into poverty in old age. We all know that many women and carers do not receive the full basic state pension because of their broken employment histories. The Government proposals will begin to tackle that problem, but they will still leave far too many people in poverty. We should have the courage to take the bold step of true reform and provide a state pension that delivers for all our pensioners. The state must provide all pensioners with a decent minimum income in retirement and take real steps to ameliorate the regressive effects of private pensions for those on lower incomes.
	Whenever the matter is debated, the Government talk about the pension credit, as they have done again today, but why should our pensioners rely on means-tested benefits, which is the effect of the pension credit, for a decent retirement pension? The Government accept that the basic state pension is insufficient, which is why they have introduced the pension credit to increase pensioners' incomes to a decent level. Under our proposal for a citizens pension, every pensioner would have a decent pension, which would be set at the current level of basic state pension together with the maximum level of pension credit. We would link the citizens pension to rises in average earnings from the start, rather than basing it on future uncertainties.
	By introducing a citizens pension, we would ensure that all our pensioners are lifted out of poverty, that they have a decent basic pension on which to build and that they do not have to rely on means-tested benefits, which many of them will not claim. According to the National Pensioners Convention, 2 million UK pensioners, of whom about 200,000 live in Scotland, do not claim pension credit although they are entitled to do so. The citizens pension also has the distinct advantage that the current system is a disincentive to save since, in effect, those with savings lose out on pension credit, and unless one can afford to save a substantial amount towards a private pension, there is a disincentive to do so. The White Paper mentions research that shows that there should be an incentive to save under the current system, but if there is, it does not seem to be working. Many have seen much of their savings wiped out in the recent past, which has created a great deal of wariness and resentment among pensioners and those approaching retirement.
	It is legitimate to ask—I am sure that someone will—how the citizens pension can be paid for. It can be paid for by utilising the amounts currently paid in basic state pension and pension credit and, crucially, reforming the current system of tax relief on private pensions. I cannot understand why the Government will not examine that proposal.

Anne Begg: I have heard the hon. Gentleman make this argument on a number of occasions. What would he say to the constituent to whom I spoke on Saturday, who complained about having to pay tax on her pension? I explained that the money was tax free when it was paid into her pension, but under the SNP proposal, that money would be taxed when it goes in and, presumably, taxed when it goes out.

Michael Weir: The point is to consider taxation on private pensions. The system will change, whether we use our proposal or the proposal in the White Paper. I am sure that the hon. Lady attended the meeting this morning, where the hon. Member for Edmonton(Mr. Love) specifically asked the representative from the Pensions Commission about that matter. The representative from the commission talked about the complexity of the matter and the fact that many people have already received fairly substantial benefit from tax relief on private pensions. Labour Members often say that we must tackle the hard issues, and the hard issue in this case is the amount of relief on private pensions.
	This morning, Professor Hills from the Pension Commission explained why both Turner and the Government have rejected changes to relief on private pensions, which was the first thing that the Secretary of State did when the Turner report was published. We believe that that is short-sighted and that the correct way forward is to deal with the blatant inequalities in the present system. There is absolutely no evidence that the present system of pension tax relief encourages private savings, which is the object of the system.
	We agree with the Government that we must do more to encourage private saving over and above what the state provides. That is why we are interested in the NPSS, which has a lot of merit and which I shall discuss in a moment, if I have time. The current system of tax relief on private savings costs a fortune and is massively geared towards the better-off. When we compiled our proposals in 2003-04, the economic cost to the Treasury in terms of tax forgone with this subsidy was an estimated £11.4 billion. In his report, Lord Turner points out that the cost of that tax relief is about £12 billion and that there is a further £8 billion in national insurance, which takes the total cost to£20 billion a year. In effect, that is a massive subsidy to private pensions, rather than using taxpayers' money to provide a proper state pension.
	Worse still, more than half of the total cost of tax relief on private pension contributions is received by the richest 10 per cent. of the population. Unlike spending on state pensions, which is being restricted, there are no restrictions on the total amount of private pension savings. It is high time that tax relief was reformed to become much more progressive and transparent. In particular, it should be aimed at encouraging and rewarding low and moderate income earners to save for retirement. By reforming that relief, those billions could be released now to fund a citizens pension.
	Instead, the Government propose to raise the retirement age for the state pension, and Sir Humphrey Appleby would be proud of how this is described in the document:
	"We will support and encourage extended working lives".
	That is a cuddly and innocuous way of telling everyone that they will have to work for longer, which is unnecessary.
	The hon. Member for Dumfries and Galloway(Mr. Brown) has hinted at a specific problem caused by the disparity between various socio-economic groups and various areas of the country in terms of life expectancy, which can have a dramatic effect.
	Let me take just one example. A man in Glasgow has a life expectancy of 69.3 years, while a man in Kensington has one of 80.8 years. At present, Kensington man can expect pension payments of £65,728, which is nearly four times that of Glasgow man, who can expect £17,888. That becomes even worse once the age is raised to 68, when Glasgow man would receive £5,408 while Kensington man would receive nearly 10 times more, at £53,248. That is manifestly unfair. At least Lord Turner recognised that there was a problem in this regard and recommended that eligibility to pension credit should remain at age 65, but even that has been rejected in the White Paper. It seems that Sir Humphrey has been busy again, as paragraph 39 states:
	"We think that this is an issue that must be considered nearer the relevant time in the light of the available evidence about inequalities and life expectancy and trends in working among older people."
	The evidence on lower life expectancy among various groups in various areas is already available. When is the relevant time to decide on this issue? Although it may be many years before the retirement age rises, the decision to raise it will be taken shortly. If the Minister is serious about persuading people of the necessity and desirability of doing so, he must deal with the problem of the differentials in life expectancy; otherwise, he will get none of the consensus he so desperately seeks. One cannot work in averages across the spectrum.
	In our proposals, we put forward ideas relating to private savings and enrolment in schemes, including a Government-backed scheme called the state pension fund, or Scotsaver account, which would provide individuals with a more secure alternative to occupational and private pensions. That is not too far away from the idea of the national pension savings scheme, which we welcome, because such a scheme is necessary. However, we urge the Government to accept that any scheme must be state-backed. We are concerned about what the White Paper says about allowing private providers. There is plenty of evidence that people do not necessarily want choice, but safety, in their pension provision, which means that however the money is invested, it must be a safe investment. That should not be confused by having too many providers and too much choice. Many of the problems in the pensions industry were caused by the breakdown in confidence following the mis-selling and company pension scandals, whereby some people's pensions were frankly stolen by unscrupulous employers.
	We can support some aspects of the proposals, and the citizens pension should still be on the agenda.

Kali Mountford: That is true to some extent. I also find some pensioners who, having taken advantage of the many offers available to them, say that they have never been so well off. There are two views. At many pensioners meetings, I am first harangued by those who take that position, and then quietly spoken to at the end of the meeting by those who say, "I didn't really like some of what was said to you, Kali, and I'd like to put a different view to you." The two arguments never seem to meet. I make no apology for the fact that when we came into government our first objective was to tackle pensioner poverty; that had to be the right way to go. However, it would not be right to continue with a scheme that would fix means-testing in perpetuity. We need not feel ashamed about helping those who were the very poorest and ensuring that the resources that we had were targeted at them, but we must find a way to move on from that.
	I feel as though I am in "Back to the Future", as I have debated this issue for many years. The first time I spoke about what we should do about what was then called the demographic challenge was in 1986. Now,20 years on, it is a demographic time bomb. We have been talking about this for such a long time, with so many different views, that a consensus had to be reached at some point. It has taken us a long time to get to where we are today, but it was vital to do so.
	The hon. Member for Runnymede and Weybridge (Mr. Hammond) asked us to look forward still further, to 2064. That briefly reminded me of the advert that I saw for a clairvoyants' event that had been cancelled due to unforeseen circumstances. The problem is that as time goes on, the period that we have to consider when we think about pensions must be a long way into the future but cannot be fixed in stages. The hon. Member for Weston-super-Mare (John Penrose) made an impressive speech in which he said that he was worried about setting staging posts for events because that would undermine sustainability and the settled position that we might arrive at in this Chamber. Some people say that we have to predict the future and stage everything precisely, while others say that we might have to adapt in the light of unforeseen changes. Both arguments are equally valid.
	There have been huge demographic changes since 1986. As my right hon. Friend the Member for Birkenhead (Mr. Field) said at the beginning of his speech, our life expectancy has already risen since the beginning of the debate. That will continue to be true. However, we must also take into account the other social changes that are going on. Young people are not looking after themselves as well—they are not taking exercise or eating properly. If a child aged seven, eight or nine is eating burgers all the time, although we are trying hard to get them to eat something else, we do not yet know what will be the impact on their life expectancy. What will their work pattern be like? What will their life be like as a consequence of social changes and changes to work-life balance and what happens in the workplace? Will the economic changes that have made this debate possible be sustained into the future?
	My hon. Friend the Member for Bradford, North (Mr. Rooney), who is not here at the moment, spoke about the impact on people who might need retraining having left one job at the age of 50 or 55 in the expectation of finding another. When I studied this in 1986, it was clear even then that the higher the level of unemployment and the less people earn, the more likely it is that a person will be considered old. At that time of very high unemployment, particularly in Liverpool, a person was identified as being too old to work even at 35, because it was cheaper and easier to employ young people and get rid of them quickly. Employers wanted that flexible labour market. That is not today's environment. Sustainability in the work force and the economy cannot be accurately predicted for the next50 or 60 years, although I would like to think that it could be. Let us be honest with ourselves and accept that labour markets, work patterns and new technologies change. That will and must have an impact on future pension expectations, not least in relation to the amount that people can afford to pay in.
	That is especially true for young people, among whom we are seeing a distinct change in social behaviour. For our generation—if I can be so bold as to say that, looking around the Chamber and seeing far too many people who are younger than me—buying something today and paying tomorrow was not the norm. I grew up in a household where we paid for what we could afford and did not buy what we had not saved for. Things have changed. Young people today expect to use a credit card, and there are worries about the amount of debt that they take on. Is it right for those same people to be asked to pay into a pension? I think that it is. If they had to choose between the kind of holiday that they can pay for only with a credit card, and the type of holiday that they can afford at the same time as paying into their pension, that would be a desirable social change. It would be right to ask people to contribute to their pension at an early age. I lecture the young people in my family about that ad nauseam. I see their eyes glaze over every time I do it, but it is necessary.

Kali Mountford: That is precisely why we have problems in the pensions sector now. There were warnings in the 1980s about the challenge of longevity, pension holidays and soft economic management. Trade unions and employers alike referred to taking people out of the labour market in that way as the kindest cut, but that was a short-sighted view, as Members on both sides of the House have accepted in conversation with me, in private if not in public. That process was not as kind as it appeared, and we are feeling its impact now.
	We must find solutions, and those solutions must have sustainability built in, or they might fall at thefirst hurdle. That is where I agree with Opposition Members. We must therefore let go of some old ideas about people having a certain level of income, or the same job, throughout their lives. The world no longer operates in that way. When I accepted that I would have to work until 65, I tried to view that as an opportunity. When I thought about an ageing, white-haired old lady doddering around the place, I realised that I might not be doddering around this place but another place—[Hon. Members: "No."] I always accept compliments. These days, however, a woman of 65 is generally perceived as much healthier, more agile and having a great deal more to offer. In previous generation, women were not perceived as having much to offer at all. We were perceived as largely dependent. I welcome the huge shift in that regard in these proposals.
	It has been a scandal that women have benefited least from any of the systems. Women have to claim most means-tested benefits, and live the longest on the least money. That is a scandal that must be redressed. The most important outcome to me was not whether a citizen's pension or universal pension was introduced but that we recognised women's contribution, which might be years of caring for children, older people or disabled people. We now have a real task ahead of us to reach a clear definition of a carer. We have not made that clear enough, and we need to work on it. How will we make sure that our proposals really cater for those years of caring? When women take on work, accepting that the contribution period for their state pension will be shorter, we must give them confidence that the valuable contribution that they made to society through years of caring for parents, relatives and children will be properly recognised. Society could not have managed without those women in the past, and we must recognise their contribution properly in the future.
	We must also continue the link between an individual's contribution and the benefit that they receive. If entitlement is simply linked to residence, there will be a disconnection between that and people's contribution to society, either through work or caring. That matters to me, as it is a valuable element of building consensus and making sure that the system can be sustained into the future.

Nigel Dodds: I welcome the opportunity to speak in this important debate. I also welcome many aspects of the Government's response to the Turner report. However, I want to deal with concerns that have been expressed by a number of Members about the Government's woefully inadequate, indeed scandalous, response to the parliamentary ombudsman's report on workers who have effectively been robbed of their pensions through no fault of their own.
	There are more positive aspects. I join the hon. Member for Colne Valley (Kali Mountford) in welcoming the White Paper's proposals for women and carers. A number of Members have drawn attention to the disgraceful circumstances in which many retired women find themselves. Those women, who have given years to caring for disabled relatives and others, have fragmented work records, and on retirement are utterly dependent on the work records of husbands or partners. Many who have no husbands or partners find themselves in dire poverty.
	I am glad that the Government intend to alter the contributory principle to take account of paid contributions, and that far less will be necessary from now on. I am also glad that it will be altered to reward social contributions. Pensioners, many of them women, come to my surgeries and ask "What is in it for me?" The sad fact is that there is not a great deal in the report for many of today's female pensioners. I shall say more about what the Government might do to assist the pensioners of today.
	I am also glad that, at long last, the basic state pension will again be linked to earnings. Many people have campaigned for that for a long time, and the Labour party was vociferous when the link was abolished. However, I share the reservations expressed by others about the fact that the link will not be restored until 2012, rather than 2010, the date suggested by Turner. If the current situation continues, by 2012 the value of pensions will still be falling, especially for the poorest pensioners. That is unacceptable.
	We need to end dependence on means-testing. As has been said by the hon. Member for Angus (Mr. Weir) and others, there is far too much means-testing. Many older people are deterred from applying for means-tested benefits because of the stigma attached to it, and it is also a disincentive to saving. I recognise the contribution made by pension credit to the alleviation of pensioner poverty. As a Minister in the Department for Social Development, which was responsible for the Social Security Agency in the former Northern Ireland Assembly, I can testify at first hand to the impact of pension credit in Northern Ireland. Nevertheless, we must end that dependence on means-testing. The best way of doing it would be to set the basic state pension at a decent level, lifting pensioners out of poverty and establishing a link with rises in earnings.
	As for the qualifying age for the state pension, I entirely understood the arguments of the hon. Member for Aberdeen, South (Miss Begg). She said that despite reservations, she had come round to the view that the proposals were acceptable. Having talked to many of my constituents, I find that many accept that someof the changes must be paid for, and this may be one of the least offensive ways of doing that. However, the Government will have to deal with the issue of inequalities in life expectancy between people in different parts of the country, and between different types of worker. Problems will be stored up if manual workers are expected to work until they are in their late sixties, although they have a shorter life expectancy than others.
	The Government must think about today's pensioners as well. They must tackle the question of why so many pensioners do not claim pension credit and other benefits to which they are entitled. A recent report in Northern Ireland turned a spotlight on the tens of millions of pounds being paid to people wrongly through error, fraud and the like. I am sure that the same applies in other parts of the country. It was right to identify that problem, and everything possible should be done to tackle it. Nevertheless, more attention should be paid to the hundreds of millions of pounds that are not claimed by the poorest members of society, including pensioners, who are entitled to that money. The Government must do more to ensure that entitlement to benefits is taken up, especially by pensioners.
	Members have mentioned the winter fuel allowance, which was raised from £75 to £200 in 2000 but has remained static ever since. Given the enormous increases in fuel prices—which have also been mentioned—it is incredible that the winter fuel allowance is the one payment that has not risen in line with inflation. The Government could do something for today's pensioners very easily by raising that allowance.
	A number of Members in all parts of the House rightly mentioned the parliamentary ombudsman's report and the Government's response. Along with others, I have constituents who have suffered greatly as a result of shortfalls in their pension funds. Having contributed for many years, they face a future devoid of the standard of living that they expected. Indeed, many have no hope of a decent standard of living. Those people are devastated: they feel that they have been robbed.
	Some workers travelled from Northern Ireland today to attend the debate. I am sure that they were heartened by some of the speeches made by Members throughout the House. I pay tribute to the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne), who spoke eloquently on behalf of her constituents. She voiced many of my concerns, and those of other Members, about what the Government have failed to do. Although the Government have introduced a pension protection fund and a financial assistance scheme, I do not think that they have done enough to compensate workers properly. They have not done enough to return their expectations to them, and enable them to look forward to a retirement involving a degree of dignity and decency and the standard of living to which they are entitled.
	The workers in my constituency who were employed in the Richardson's IFI plant paid into a fund, as they had been advised to do. They did that on the basis of the best advice, believing that their retirement income was secure. They had every reason to believe that as49 per cent. of the company was owned by ICI and 51 per cent. by, believe it or not, the Irish Government. Two plants were located south of the border and one was in Belfast, in my constituency. The workers in the Irish Republic have rightly had their pension rights sorted out and have been compensated, but the workers in Belfast have been left bereft of their pension entitlement and have to rely on the financial assistance scheme.
	We all want to see better relations between Northern Ireland and the Irish Republic, so I ask that the Irish Government treat those workers in the same way as they have treated their workers, as a tangible example of better north-south co-operation. We hope to put those points directly to Bertie Ahern, the Irish Prime Minister, when we meet him on Thursday. Such fair treatment would go a long way to proving that he means what he says about treating people on either side of the border the same. It seems that fair treatment is all right as long as it does not cost anything, but when it is time to divvy up millions of euros, it is a different matter.

Adrian Bailey: I welcome the White Paper. Of all the White Papers that I have ever read, it is probably the most lucid exposition of a complex subject. The exploration of the social, demographic and behavioural context of pension policy is illuminating and has informed our debate today. I congratulate Ministers on tabling this motion so that we may have a full debate before legislation, so that we can tease out the different issues and address the points made by all the parties. I hope that we will achieve consensus on the subsequent legislation as a result.
	This is a hugely important debate. I congratulate the Government on what they have done to lift pensioners out of poverty—several Members have recognised the positive effect on pensioner poverty of pension credit and other Government provision—but the model that has been successful in the past few years in raising the poorest pensioners out of poverty is not necessarily adequate to meet the demographic changes of the future and the behavioural issues that we need to address to ensure that we have decent pension provision in the next few decades.
	In the past, as the hon. Member for Weston-super-Mare (John Penrose) said, legislation in this area has been piecemeal and complex. If we are to establish a consensus, it has to start here and then be recognised by the public. The White Paper provides a basis for achieving that. Any new provision has to be so obviously fair and command such wide public support that future Governments are not tempted to tinker with or remove its basic elements. Above all, the scheme must also be affordable, so that future state pension provision is insulated from the vicissitudes of economic ups and downs that might otherwise tempt a Government to change it. There will be less reason to change a scheme that is affordable.
	I recognise that the measures that this Government have taken to lift pensioners out of poverty mean that there is no immediate crisis, but profound problems remain that must be tackled if these proposals are to be successful. A combination of social attitudes to saving, what the White Paper terms "behavioural economics", the complexity of pension provision and a lack of faith in the savings industry is making it very difficult to establish in people the commitment to pension saving that is going to be needed if we are to resolve the difficulties in the future.
	The first matter that I want to deal with is the live now, pay later culture that several hon. Members have mentioned already. Yesterday, I saw a news item celebrating the 40th anniversary of the introduction of the credit card. I confess that I was alive and around in that era and can remember that buying things on hire purchase was not really respectable. People did it, but it was frowned on, especially in tight working-class communities.
	What a revolution there has been. People in our consumerist society are bombarded with expectations of a certain quality of life, irrespective of their incomes. That, combined with the accessibility of easy credit, has changed everything, and our well-documented spending culture does not sit well with the level of pension provision that we want for the future.
	The Government can change the culture by changing the way that state provision is made, and the child trust fund is a good example of that. I spoke today to the chief executive of one the fund providers, who told me that there is considerable evidence already that people are adding to the funds—even those allocated by the Treasury—and using them for saving purposes. The jury is still out on the child trust fund. It is still in its early days, and people might say that I was bound to support it, but the initial signs are encouraging. The fund is an example of how the state, through the way that it implements support, can change cultural habits and encourage people to save rather than spend.
	The same is true for pensions. The national pensions saving scheme has automatic enrolment, which means that it can harness people's inertia about pensions. I do not want to sound contradictory, as that inertia has been a bugbear in the past and a reason why people did not get around to sorting out their pensions. However, the automatic enrolment in the pension savings scheme means that that inertia can be used to assist saving, rather than the opposite.
	That is crucial to the scheme's success, but I echo what my hon. Friend the Member for Bradford, North (Mr. Rooney) said earlier. He is not in his place just now, but he was right to say that it is possible for unscrupulous small employers operating on tight margins to undermine the scheme by urging their employees to opt out. I am the last person to advocate a heavy regulatory regime to enforce the scheme, but I hope that Ministers will raise this very important matter in the discussions that I know they are having with the small business community.
	The history of the savings industry has damaged how people perceive that industry, as well as their incentive to save. Pensions mis-selling, problems with endowment mortgages and the collapse of so many defined-benefit company schemes have led many people to believe that saving is just not worthwhile, as they will not get value for money. In common with many other hon. Members, I have a company in my constituency where decent, honest, working blokes who saved in a scheme for many years have lost all the benefits that should have accrued to them. They qualify under the financial assistance scheme, but no pay-outs have yet been made. I know that the Department is looking at ways to speed up the administration of the scheme and the payments made under it, but changing people's perception of the value of saving requires us to bear in mind that every failed scheme is a personal tragedy for those involved. It is also a huge public relations disaster and a massive disincentive to future pensions saving. All that must be sorted out if we are to re-establish confidence in saving for pensions.
	Finally, I come to the question of the retirement age. I believe that a large proportion of the public wants to work later in life. People may not want to do the same job that they have done for most of their lives, or even to work full-time, but a huge number feel that they can still contribute to the economy and the community when they reach retirement age. They want to enjoy the sense of self-respect and well-being that goes with working. If the retirement age is to be increased, part and parcel of that must be the provision of support for people in their 50s and 60s—and older than that—so that they can find the sort of jobs that they need.
	In my area of West Bromwich, West the history is one of heavy industry, with demanding jobs, poor health and a life expectancy much below average. The Government must look at the provision for people like those in my constituency, who will not enjoy the same post-retirement lifespan as others. I welcome the White Paper's commitment to examine whether the guarantee credit and the pensions credit could remain available at age 65, and I welcome, too, the Government's determination to undertake proper monitoring of what is going on so that people such as I have described do not lose out.
	In conclusion, I believe that the Turner report carried real weight. It was robust and received wide support from all groups. The White Paper builds on and refines its recommendations. It is robust and constructed in such a way that we cannot remove certain proposals and go ahead with the rest, as they are all interconnected.
	The complex combination of funding and payments and the construction of different schemes is such that if one element is removed the whole is weakened. I urge Members to recognise, whatever their feelings, that the package is good; it is fair and robust and can command consensus not just in this place, but in the country as a whole. It will be a huge improvement on what has happened previously, so we should all work to give future generations something that past generations never enjoyed.

Michael Penning: I have been listening to the debate for the past four and a half hours and have thoroughly enjoyed the cross-party discussions on this important issue.
	We have heard a lot about consensus. No matter what consensus we may reach in this place, among the major political parties or out there in the country, I fear that, unless there is trust in our pension schemes, all that hard work may go to waste. The White Paper will not be worth the paper it is written on if the public do not believe in the pension schemes that result. Indeed, they have every reason not to believe or trust in pension schemes, given what has gone on over recent years.
	About four years ago, when I was a parliamentary candidate, the former Dexion workers in my constituency asked for my support in their campaign for natural justice in respect of the pensions that had been stolen from them. I sat with them for three days and went through the detailed documentation they had provided through their trustees about actions in which they felt the Government had been involved. Long before the ombudsman's report, I came to the conclusion that they had been treated very badly.
	The number of people who have lost their pension has gone up dramatically since then. The early figure was between 70,000 and 80,000; now the number is 125,000 plus—I am sure that the Minister will take me to task if I am wrong. Seven hundred of those people are my constituents, but the loss of their pension does not affect only them; it hits their extended families and their loved ones, especially their widows who, in some cases, have suffered so much. In addition, the situation has massively affected people's confidence about investing in a pension scheme.
	We are asking the public to trust Governments and pension companies with their future—with their retirement income. So much of what has been said today shows that they will not have that faith in the future. I freely admit that there was a problem with pension mis-selling, which had to be addressed. Things went wrong and that had a major effect on people's confidence, but there has been an even bigger effect over the last few months when an independent parliamentary ombudsman, appointed by the House, came up with a damning report on the Government's involvement in the collapse of pension schemes. That has had a massive knock-on effect.
	Ordinary decent people who changed their standard of living so that they could put something away for their pension have lost so much. It is difficult to see how we can involve the public in this great consensus debate about trusting the Government—no matter who is in power—if we do not address the problems faced by those thousands of decent, honest people who put something away for a rainy day and for their retirement.
	I stood on a manifesto that said that those people should receive the minimum funding requirement—80 per cent. of their pension—from unclaimed assets. Halfway through the run-up to the election, the Government came up not with a clear compensation scheme but with the financial assistance scheme. It comes from taxpayers—from public funds—which is good and it can be added to the estimated £15 billion that is sitting around in unclaimed assets. The Chancellor wants to use some of that money for worthy causes and I cannot think of a worthier cause than repairing the damage to people's pensions and restoring their faith.
	The knock-on effects will also be felt if something similar happens in the future. In the 13 months that I have had the honour to be a Member, I have been asked several times whether I would take up with the parliamentary ombudsman something that my constituents felt was fundamentally wrong. In some cases my answer would be yes and in others no, but even if I did pursue a case, the Government might simply ignore the ombudsman's ruling. My constituents' faith in Parliament has been massively affected by the pensions problem. The future role of the ombudsman is at risk, if when that person comes up with a report, whether it is for or against the Government or impartial, it is completely ignored.
	The ombudsman's report was damning. My constituents, like those of other Members who have spoken today, felt rightly that their pensions had been stolen from them. Some Members have said that we should look more closely at individual cases, and the Minister should consider that proposal seriously. Instead of wrapping everything up in one bundle and saying that all the blame lies with the Government or with the companies, we should look at individual cases. If the Government's approach to an individual scheme was fundamentally flawed, they would have to say so. The ombudsman found in general terms that there was maladministration in the way that Government had dealt with pension schemes.

Michael Penning: The hon. Gentleman makes a valid point. The Prime Minister seemed to make up the figure of £15 billion on the hoof at Question Time. Many estimates are that the amount could be as low as £3 billion or £4 billion over a 50-year period—not £15 billion to be taken immediately from the taxpayers', or the Chancellor's, budget.
	Considering schemes individually could alleviate some of the public's concerns about whether the figure of £15 billion is correct. Another aspect of natural justice that the Minister could look at relates to the Pension Protection Fund that has been set up for future pensioners who suffer. The cap is £26,000.49, yet under the financial assistance scheme—should people be lucky enough to qualify—it is £12,000. Why are those people being treated as second-class citizens? Why are they being told that they will qualify only when they have less than half the funds required under the PPF criterion? It does not seem fair that those whose pensions have already been stolen are subject to a much lower cap, especially given that, as we heard earlier, because its value is not index-linked, it is falling day by day.
	Another aspect is desperately important—I cannot emphasise how important it is. Many people paid large amounts of their income into a pension not only to secure their future, but that of their loved ones. There are some extremely sad cases. Many people have been unable to accept that they would not be able to provide for their loved ones in the future, as they had promised to do. There have been cases—although not in my constituency—of people who took their life due to depression because they were so worried about their family's future and about letting them down.
	A delegation from my constituency visited me today. It included a wonderful lady, Marlene Cheshire, whose husband, Dave, had paid into a scheme for nearly 30 years. Soon after the scheme collapsed, he was diagnosed with terminal cancer. Just before he died Marlene told him that everything was sorted and that money from the financial assistance scheme was coming through. I am sure that she will not mind me telling the House that she misled Dave; the money had not come through. Only five of the 700 people in my constituency qualified. Marlene has got some money now: she has £20 a week. Her husband paid thousands of pounds in.
	If we want to move forward—I desperately want us to, because I accept all the arguments about the fact that we have an ageing population, that the funding is not there and that we have only four people working for every one person getting a pension—we need the confidence and the trust of the public. To gain that trust, we have to address the problems of the pensioners who have had their pensions stolen from them. I have met the Secretary of State. Will the Minister look at the way in which the scheme is being used and compensate those pensioners for the pensions that have been stolen from them?

Iain Wright: It is a genuine pleasure to follow the hon. Member for Hemel Hempstead (Mike Penning). We speak fairly regularly and I know that he is an extremely hard-working constituency Member. Regardless of party affiliation, I support him in that. His constituents are lucky to have him. I want to follow on from the points that he raised. I want to make two points. The first is about the big macro-economic and financial pressures on pensions and pensions policy—and particularly on occupational pension schemes in the UK and also throughout the developed world. The second point, which was raised by the hon. Gentleman and other hon. Members, is the very real effect that those pressures are having on a number of my constituents, and, as the debate has shown, a number of other hon. Members' constituents, in terms of compromising and sometimes ending completely the planning that they have undertaken for their retirement.
	In the post-1945 period, companies provided an element of security for workers with regard to provision in retirement. Defined benefit pension schemes helped to inject both motivation and loyalty into the work force. In the relatively stable environment of the post-war period, that was entirely feasible. Risks associated with planning for retirement through a defined benefit scheme were borne almost solely by the employer. If a defined benefit scheme fell short, the employer topped it up. That warm and cosy scenario for occupational pensions has been put under severe strain over the past two decades or so for a number of reasons. First, the growing stock market and rising pension fund surpluses in the 1980s enabled the Conservative Governments of the time to impose greater costs on pension schemes—for example, by taxing pension fund surpluses under the misapprehension that pension fund surpluses were a cash cow that could be milked for ever. Secondly, the 1980s saw a break with the link between pensions and earnings, because the Conservative Government of the time made a political judgment—incorrectly as it turned out—that those in work had generously funded company pensions and would not have to rely on state provision. Thirdly, the unemployment policies of the Tory years resulted in high levels of redundancies and factory closures, which, paradoxically, had a positive effect on pension fund surpluses. That was partly because there was a receipt from the sale of capital assets and partly because the number of early leavers from schemes meant a sharp reduction in scheme liabilities. Fourthly, during a period of a historically strong stock market performance, many companies took pension fund contribution holidays. That trend had extremely adverse effects when the markets corrected themselves after 2000.
	On the back of lower stock market performance, companies redirected investment decisions for pension funds towards Government bonds. That trend has been accelerated by the fact that the Pension Protection Fund has charged risk-rated premiums, which in turn has encouraged a move into low-risk assets such as bonds. Over the past few years, that has depressed yields and reduced the ability of pension funds to recover from their deficit position. I acknowledge the tension that exists between ensuring that high-return, high-risk investments do not jeopardise the long-term financial situation of schemes, and allowing recovery to take place quickly. However, I would be grateful if the Minister could say in his winding-up speech whether his Department will look again at whether the PPF could change that rule in relation to risk-related premiums.
	Underpinning those developments have been the strong forces of globalisation and demographic change. The opening up of international markets and the rise of the electronic economy mean that companies have become ever-more powerful and are able to transfer operations anywhere on earth in order to secure a more effective rate of return. The culmination of those forces has meant that companies providing occupational pension schemes have sought to transfer the risk of providing pensions away from themselves and towards their employees and Government. Given the growing power of companies, they have been able to achieve that with some success and in recent years there has been a reduction in the number of defined benefit schemes on offer.
	That trend has been accelerated by a wholly inappropriate accounting scheme. FRS 17 could almost be seen as the last nail in the coffin for decent occupational pension schemes. I should point out that I am a member of the Institute of Chartered Accountants in England and Wales. FRS 17 has good intentions in that it tries to push forward the correct principle that a pension fund and its assets and liabilities should be an integral part of a company's financial position. However, the fact that surpluses or deficits in the pension scheme are recognised in full on a firm's balance sheet has meant significantly greater volatility, with adverse effects on pension schemes.
	All those factors have meant that companies have had an appropriate environment in which to try to transfer the risk of planning for the retirement of their work force away from themselves and towards employees and Government. Perhaps more than any thing else, that is a vivid example of companies in the modern era becoming possibly more powerful than Governments.

Iain Wright: I understand what the hon. Gentleman is saying. Hindsight is a wonderful thing. I remember a report at the time that said that the stock market would go on rising and that there was no need to worry. That proved to be plainly wrong. We should be a lot wiser in this day and age.
	It is important to recognise that, in the context of big, global forces, the lives of ordinary men and women are being affected. My hon. Friend the Member for Cardiff, North (Julie Morgan), who is not in her place, secured an Adjournment debate in Westminster Hall earlier this month about the financial assistance scheme, and made vivid points about workers in her constituency. My hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) has also made such points, as has the hon. Member for Hemel Hempstead. I am not as eloquent as those hon. Members, but I echo their points on this issue. Far too many of my constituents have been caught up in these large forces as the risk of providing for retirement is being moved away from employers towards employees. Those men—in my constituency, they are predominantly men—did everything that was expected of them. They are decent, ordinary, hard-working, working-class men. They wanted to provide a secure and enjoyable retirement for themselves and their wives and families. They did not want to be a burden on the state. They paid into a pension scheme, often for decades, because they had an implicit understanding with their company that a definite level of payment would be provided for them when they retired. Now, because companies are trying to shift the risk, as I keep mentioning, those people are being left with nothing—often months before retiring. That is surely not fair.
	I have a number of constituents who are part of the Roxby pension scheme. The scheme is in the process of being wound up, but because that is taking some time and it is still classed as operational—it started to be wound up in 2003—the Roxby pensioners are not eligible for Pension Protection Fund money. I understand that they may be entitled to financial assistance scheme money, but have not heard anything yet. This issue is taking some time to resolve, causing stress, anxiety and uncertainty to my constituents and their families. Like my hon. Friend the Member for West Bromwich, West (Mr. Bailey), I urge the Government to consider streamlining the processes to provide a swift judgment for those pensioners and others.
	The plight of those people is exemplified by Mr. Robson, a constituent of mine. After paying into the Roxby scheme for decades, he would have been entitled to about £14,000 a year at the normal retirement age. We are not talking about footballers' salaries. Now, he is forecast to get nothing, and, given his age, he is not really in a position to do anything about it. Although the financial assistance scheme is a good idea, it fails to take account of length of service and concentrates instead on the length of time before retirement. If the likes of Mr. Robson have paid into a pension scheme for some 30 years, surely there is a moral, if not legal, obligation for commitments to be honoured by firms.
	Mr. Hughes came to see me in my constituency surgery only last Friday. He has worked at Carpets International for many years, but the firm is now being wound up. He was told in 2002 that his fund was worth £67,000 and that he would be entitled to a pension of about £8,000 a year. Now, some four years later, that fund is worth £18,000, which has to last him a full retirement. He has an estimated 10 years of his working life in which to sort that out. I know that the financial assistance scheme will, I hope, help people such asMr. Hughes, but there is a strong case for providing even more help for people such as Mr. Robson andMr. Hughes, who have done everything right, yet find on the eve of their retirement that all their plans have been destroyed.
	I just want to mention one final pension scheme. Expanded Metals, or Expamet, is a staple firm—I hope that hon. Members will forgive the pun—of my constituency. However, the pension scheme is in the process of being wound up because the firm cannot meet its liabilities. Expamet is still trading, so the workers and former workers who are affected fall between two stools. I understand that the financial assistance scheme applies only when a firm has gone bust, while the Pension Protection Fund covers future victims. Will the Minister explain what can be done for people such as Paul Whitton, who has worked for Expamet for some 30 years, yet will now receive only40 per cent. of his planned pension, and Mr. andMrs. Edwards, who, together, were members of the scheme for 53 years, but are now contemplating a pension of £12,000 a year, rather than close to £30,000 a year, as was originally planned?
	I stress again that these people—my constituents—did everything right, but are being penalised for a combination of global factors that were outside their control. I understand that those forces are pushing firms to move risk away from themselves and towards individuals. I do not want to tip firms such as Expamet into liquidation, which would lead to the loss of valued jobs in my constituency. However, I urge Ministers and, indeed, the whole House to reach a consensus that people who have planned for their retirement in the correct manner, using occupational pension schemes, should have such commitments honoured as much as possible.
	As the White Paper rightly identifies, pension provision will become more problematic as the general population gets older and there is a greater squeeze on the working population. I have tried to acknowledge in my contribution that these forces are great and cannot be reversed with any great ease. However, I still think that both firms and the Government, to some extent, have a moral, if not legal, duty to people who did what they should and planned for retirement properly.

Philip Dunne: I remind the House of my entry in the Register of Members' Interests. I have a personal pension, and I am also the director of an investment management fund that manages several small pension funds.
	I shall talk about specific aspects of the proposals in the White Paper for most of my contribution, but I would first like to touch on an issue that has resonated around the Chamber from many hon. Members' speeches: trust and consensus, and the need to rebuild confidence through the Bill that emerges from the White Paper. The issue was put forward most succinctly by my hon. Friend the Member for Weston-super-Mare (John Penrose), and I pay tribute to him for his persuasive and forceful contribution. It is important that there is a broad political consensus on whatever emerges from the proposals.
	When I first arrived in the House a year ago, I took the view that the question of pensions was one of the two or three biggest issues that parliamentarians needed to address in this Parliament, not least because pensions had been left woefully adrift for the previous 10 years or so. We cannot allow that situation to continue, for all the reasons that have been cited in the debate. The demographic changes are so important that we cannot continue to ignore the pension system that we set up for future generations. I congratulate the hon. Member for Hartlepool (Mr. Wright) on his positive contribution. He made useful remarks about the need for consensus.
	We need to remind ourselves that the Government are not immune from responsibility for several factors behind the difficult situation in which many pensioners find themselves. Hon. Members on both sides of the House have talked about problems that are beyond the Government's control, but at least some responsibility for the significant erosion of confidence in our pension system and the savings culture lies at the Government's door. Although I want to maintain the spirit of consensus, I cannot resist reminding hon. Members of some of the problems. They are relevant because it is important that we overcome the drawbacks as we look forward.
	My hon. Friend the Member for Poole (Mr. Syms) referred to the Chancellor's tax grab on savings. The abolition of dividend tax credits played a significant part in undermining defined benefit pension schemes in particular, and occupational schemes in general.
	The 2001 initiative of introducing stakeholders was announced with a fanfare as the great white hope for introducing people on lower and middle incomes to the savings culture, but it would be fair to say that it has not been a great success. Take-up has been poor. The latest available figures show that there are about 1.5 million stakeholder pensions in operation, and the number has been broadly flat for the past three years. The schemes have suffered from high lapse rates, for reasons that are well documented.
	The Government must take responsibility for the consequences of introducing so much means-testing. I, like hon. Members on both sides of the House, acknowledge that means-testing has led to a benefit in the form of reducing pensioner poverty, but it is also perhaps the matter for which the Government are accountable that is most responsible for the collapse of savings over the past nine years. Until a couple of years ago, when the Government introduced some changes to the rules and the system became less regressive, many people had no incentive whatever to save, because each pound that they saved would lead to their losing pension benefits. We need to reverse a situation in which it is in individuals' financial interests not tosave, as the hon. Member for Dumfries and Galloway (Mr. Brown) said.
	Several hon. Members have referred to the survey that was published today by Scottish Widows. It shows graphically that the percentage of people saving adequately for retirement has fallen from 55 per cent. last year to 46 per cent. this year. There has thus been a significant reduction in just one year. The problem is especially acute among those who rely on defined benefit schemes for their pension savings. This morning, I spoke to Ian Naismith, the head of pensions market development at Scottish Widows. He said today:
	"4 in every 5 people who aren't relying on a final-salary pension are failing to save adequately for their retirement, and ...2 in5 are saving nothing at all."
	That, in part, comes down to means-testing.
	The final issue that needs to be borne in mind is the consequences of the delay until 2012—and potentially longer, as we heard earlier—of the introduction of the earnings link. As the hon. Member for Bradford, North (Mr. Rooney)—the Chairman of the Work and Pensions Committee, which I am proud to serve on—said earlier, a six-year delay is very significant for existing pensioners, or people who are about to become pensioners. Such a long period before implementing the proposals does not help to build confidence. Of course the proposals have got to be got right; I would not deny that for a moment. But steps could be taken earlier that would have a much more immediate impact—for example, introducing the earnings link. I know that that has been the subject of great debate between the Prime Minister and the Chancellor, but Ministers need to look at that issue when they turn the White Paper into a Bill.
	Having got that off my chest, I endorse the view that we need to achieve a consensus through this proposal in order to rebuild trust among the population at large in the idea that saving is worth while. I am not absolutely convinced that the Secretary of State's claim that for every hour that we sit in this Chamber we add an extra quarter of an hour to our own longevity helps to build confidence in the system—although I am sure that he will be able to produce the evidence that supports that claim. I again endorse what the Select Committee Chairman said: this is a fine example of how pre-legislative scrutiny could be undertaken to ensure as broad a consensus as possible in all parts of the Chamber on the resulting Act. I urge the Minister to address that issue in his wind-up. Is he prepared to consider a draft Bill for when we return in the autumn?
	I turn to a few specific points. When the Select Committee took evidence, one issue that arose—it has not been raised so far this evening—was that employers might regard auto-enrolment as a tax on jobs. Much has been made, particularly by Labour Members, of rogue employers seeking to force people to opt out of auto-enrolment. But the valid point that was made to us, and which needs to be borne in mind, is that once we are through the phasing in period, the contributions by employers of 3 per cent.—and by employees of5 per cent., when tax relief is included—will add a total of 8 per cent. to the employee wage bill of employers who do not provide an existing occupational scheme. That is a significant addition to the cost base of some employers, and we cannot just dismiss them as rogues because they encourage people to opt out.
	We need to look very carefully at the transitional arrangements referred to in the White Paper to ensure that they assist such employers. They may not be rogues; they could be going through difficult trading periods or a rapid growth phase, during which they need to invest as much as possible in their own business, rather than paying inflationary wage demands. We all recognise that the employee contribution is likely to be reflected in wage bargaining negotiations, and that some inflationary pressures will therefore emerge as a result of these proposals.
	For those with existing occupational schemes, there is also the risk of the levelling down of contributions from employers who may currently provide more for their employees. As defined benefit schemes decline, there has been a shift towards occupational defined contribution schemes—the real comparator to the proposed national pension savings scheme, which will be the ultimate defined contribution scheme—so that benefits get reduced for existing occupational schemes as they move on to a defined contribution basis.
	Because the NPSS is unprecedented, it is not easy for us to foresee its impact on existing schemes. We can make some glib remarks in this Chamber, but none of us really knows how it is going to work. Some comparisons can be drawn with schemes in other countries, but none of them are of the magnitude of this one. There is a real risk that existing defined contribution schemes will trend toward the state scheme, particularly with small and medium-sized employers who, for example, are experiencing trading difficulties. If that happens, savings might decline as a result of the scheme's introduction, and the Government's objectives will fail. This is another area in which I urge the Government to consider transitional measures to limit the impetus for companies to level down.
	The Government seem a bit complacent about that risk. A survey by Capita Hartshead last month indicated that 58 per cent. of providers of large schemes who are not using auto-enrolment thought that employers would level down when required to implement auto-enrolment within their existing scheme.
	The next issue on which I shall touch is fairness, which has been mentioned by several of my hon. Friends in relation to the perception that the Government are taking different approaches towards private sector schemes and public sector occupational schemes. My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), who is just leaving the Chamber, spoke clearly and well about the lack of balance and fairness in the Government's approach to the retirement age of members of occupational schemes in the public sector and in the private sector.
	It is extremely important for rebuilding trust in the whole pensions arena that the Government face up to the clear public perception, right or wrong—Labour Members have said that they believe that it is a false impression—that the Government think that it is okay to push up retirement ages for those in the private sector, but when the Government themselves are the employer, they are not willing to raise retirement ages for their own occupational schemes, which are, in effect, defined benefit final salary schemes, which are rapidly disappearing from the private sector.
	That brings me to what the Government's role should be in the new savings scheme. As others have said, there is little confidence in their ability to manage complex IT administrative schemes. There is little confidence in the Government as an investor: without wanting to get too political, we need look no further than the Chancellor's so-called prudent stewardship of the value of the country's gold reserves. There is little confidence in the Government's statements on the security of occupational schemes, as many have said in relation to the ombudsman's criticisms of maladministration. For all those reasons, it is vital that the Government acknowledge that they are not the best placed people to run the national pension savings scheme.
	I endorse the view expressed many times by the right hon. Member for Birkenhead (Mr. Field) that the Government should take a leaf out of the Monetary Policy Committee's book. They should appoint a board of trustees independent of Government, and that board should be responsible for appointing an administrator for the scheme, as well as investment managers to undertake its management. Competition between the investment managers will improve performance and drive down costs. In addition, an independent body should regularly review longevity and the retirement age. When he appeared before the Select Committee, the Secretary of State agreed that that review should take place according to a predetermined timetable, which is important to building confidence in the scheme.

Mark Lazarowicz: Like the majority of hon. Members who have spoken in the debate, I welcome the work of the Pensions Commission, which provides the basis of the consensus that we all know is required if we are to achieve a long-term settlement in pensions. At one point this evening, qualifications to a consensus were expressed that suggested to me that it might not be as easy to obtain as we had hoped, but I hope that after we have had the political debate, which clearly we must have, we do achieve it. We all know that the price of not reaching consensus will be not achieving the long-term settlement that we know is needed, and future generations will not thank us if we do not produce such a settlement.
	I shall concentrate on some of the areas in which we have not reached consensus or in which the Government have not given detailed indications of their direction of travel. Before doing that, I wish to echo the comments made by my hon. Friend the Member for Colne Valley (Kali Mountford) during her eloquent defence of the Government's strategy of making its initial priority tackling poverty among those pensioners with the lowest incomes through the income guarantee and the pension credit. I have frequently had the same experience as she has had of pensioners coming up to me after sometimes rather stormy meetings and saying quietly that they welcome the pension credit and recognise its benefits. I hope that, whatever proposals the Government eventually make on the future of the pensions system, they build on the success of the pension credit and ensure that we continue to use it to tackle pensioner poverty as one of our priorities.
	I agree strongly with the general drift of the White Paper. Having initially prioritised steps to give more money to pensioners on the lowest incomes, it is right now to take measures to ensure that we do not end up with more and more pensioners relying to a greater and greater extent on means-tested elements of their pension. I say that for all the reasons that have been advanced this evening and that will be reinforced during the continuing debate on this issue. That is why I strongly welcome the proposal to reintroduce the link between pensions and earnings.
	I would like to see that happening as soon as possible, and ideally even before 2012. I understand that there are many resources reasons why that may be unlikely to happen. However, I believe that it would be wrong to delay the reintroduction of that link to any later date. Earlier, we had a somewhat convoluted excursion into jam- making, appropriately enough by the hon. Member for Angus (Mr. Weir). I will not pursue him down that avenue. In my view, the position set out in the White Paper on the date for the reintroduction of the link with earnings is one of its weakest points. Apart from anything else, it is politically unsustainable.
	I ask my hon. Friend the Minister for Pensions Reform to consider the position that the Labour party would be in come the next general election if we were to say, "We will reintroduce the earnings link but, then again, we might not." That does not sound to me to be a particularly attractive position in which to enter the next general election. I do not think that it would stand up to the scrutiny of an election campaign. I think that the Government would ultimately be forced to come forward with a date. It would be better to take the initiative rather than to leave the matter to the vagaries of a political debate prior to a general election.
	I shall concentrate my remarks on auto-enrolment, which is at the heart of the reform proposals. There is clearly a tension in auto-enrolment. The more that we make opt-out harder, the less we have crafted a system where workers are genuinely making their own choices about future pensions and the more that we are turning the process into a quasi-compulsory system. If, perhaps by the awkwardness of opting out, we move towards something that is becoming almost quasi-compulsory, we will lose the advantages of having a system that is not increasing tax or national insurance contributions. We will be reducing the incentive of workers to take decisions about their financial futures into their own hands. If we make opt-out too difficult, people will not be in a position to make decisions about their own future with full financial responsibility. If we go along that road, we will almost be introducing SERPS by another name. Clearly that would cause problems.
	Assuming that we want to allow some meaning to the concept of opt-out—I think that that is implicit in the proposals from the commission and from the White Paper—it seems to me that a positive encouragement for opting in and discouraging opting out is to be achieved, above all, by a change in the culture of personal finance and a change in the culture of saving, so we bring about a situation where making a contribution to personal pensions of 8 per cent. across the relevant band is not the ceiling of the contributions made but is more often than not the floor of such a contribution. People and employers will be encouraged and will want to top up contributions through the NPSS or whatever scheme is eventually introduced to operate personal allowances.
	If we do not achieve that cultural shift, we will run a real risk of some occupational schemes, in which contributions are currently above the levels proposed in the White Paper, being levelled down so that pension provision is worse than at present. If the Minister has time when he replies, I shall be interested to know how he might respond to the difficulty that is presented by a possible levelling down in some existing occupational pension schemes.
	There is also the risk, to which some hon. Members have referred, of a large-scale opt-out by individual workers. If we do not get the package right, there may be cases where it might be economically rational for an individual to opt out of the scheme. We must ensure that we get the package right and that we do not see such opting out. I accept the point made by many Labour Members that there is a danger that some employers, having made an unscrupulous analysis of their short-term interests, will encourage employees to opt out. We cannot ignore that risk, and the Minister must address it carefully. We could restrict the period for which employees opt out, so that opting-out is not a process that lasts for ever but can be reviewed after a few years.
	In any event, we need a cultural shift in attitudes both to saving and to saving for retirement. It is essential that we conduct a major UK-wide exercise before a scheme is brought into effect, whether or not it is the national pension savings scheme, so that we can make the case for the new auto-enrolment scheme to employees in the workplace and, indeed, encourage workers and employers to contribute more to the personal pension. If we are to achieve that objective, employees must have access to financial advice services that they can trust, and in which they are right to place their trust. They must be able to obtain advice that, bluntly, they do not have to pay for up front, otherwise many people who most need it will be unable obtain it.
	I will not go into detail about the way in which that advice and wider financial education can be provided, but we must build on existing networks and agencies, including Citizens Advice, local money advice services, and independent advice centres. Trade unions, too, can play an important role. We must be very wary of setting up a plethora of new organisations that seek to offer advice, as that would increase the risk that individual workers would be put off by the complexity of choice. Moreover, some organisations that purport to offer independent and impartial financial advice but, in fact do nothing of the sort, may take advantage of people who are not as informed as they might be.
	If employees make bad investment choices when they decide how to direct the savings accumulated in their personal allowances, it likely that confidence in auto-enrolment will take a tumble, and a future Government will face a choice between a fall in pensioner incomes and the need to make auto-enrolment compulsory with no opt-out. The Government must look at the way in which they provide pensions information and advice. There has been a strong emphasis on encouraging the take-up of pension credit, which is all to the good, as the scheme has been a great success, but take-up could be further improved. It is sometimes difficult for people who most need financial advice and information about financial services to obtain it. The Pension Service relies heavily on the telephone and its website to provide information. In the early years after the adoption of a new pensions settlement, we must provide face-to-face advice so that people do not have to rely on call centres and websites for information and advice.
	Finally, as the Pensions Commission and many commentators have pointed out, the implications of pensions reform extend far beyond pensions policy. If we are to develop a policy based on the reasonable expectation that people will live and work longer, there is a huge agenda to address. We must encourage and facilitate the employment of older workers, and introduce more flexible working, to cite just a couple of issues. As has already been mentioned in the debate, it is workers on low incomes, because of illness or disability, or sometimes because of their employees' policies, who will be in danger of suffering badly, so there have to be measures to protect the least well-off, and of course to tackle the underlying health inequalities.
	I know that the Minister realises that, as do many other hon. Members here today on both sides of the House, but it is worth emphasising how those wider issues have to be kept in mind as we decide how to draw up a new settlement for pensions. If we do not do that, we will end up with a settlement that makes the real winners in retirement those who have already been the financial winners in their working life.

Brooks Newmark: I should like to address three concerns that arise from the Government's proposal for pension reform. Reform is, as we are all acutely aware, urgently needed in order to jolt us out of what, as Lord Turner told the Treasury Committee, has become "a collective fool's paradise".
	None the less, my first concern is that the Government are pursuing what appears to be an attempt to reinvent the wheel by suggesting that they are merely reintroducing the contributory principle. That particular principle would not need to be reinvented if the Government had first not undermined it.
	My second concern is the Government's caveat on the uprating of the basic state pension being
	"subject to affordability and the fiscal position."
	That statement is itself characteristically nebulous. But more importantly, Lord Turner's remit and the subsequent White Paper also failed to include a review of public sector pensions, where affordability and long-term fiscal position are most uncertain.
	Lastly, I want to address the danger posed by any reform that does not tackle head-on the purpose and scope of means-testing within the pensions system. There is a danger that a lack of fundamental reform of the scope of means-testing will undermine public confidence in the benefit of the proposed savings scheme, and consequently undermine the purpose of the reform.
	First, I come to the contributory principle. The pensions White Paper declares:
	"We are creating a system which establishes a new contributory principle for state pensions."
	The fact that part of the statement appears in bold type does not unfortunately mean that it is boldly going where no one has gone before. The rhetoric is over60 years old and any new substance is somewhat lacking. National insurance contributions were originally intended to be hypothecated—or reserved—for certain purposes. Sixty years later, what was envisioned as a national insurance fund is more hypothetical than hypothecated. The Government's return to the something for something rhetoric of the contributory principle is disingenuous, because uprating the basic state pension apparently remains dependent on future affordability. Those who are contributing today, and may have done so for their whole lives, will still depend for their retirement income on the Chancellor's assessment of the fiscal position over the next few years.
	I come now to my second concern, that the Pensions Commission remit did nothing to address the mounting public sector pension deficit. If we are to be confident that the basic state pension will in fact be relinked with earnings, we must be reassured about the Chancellor's assumption regarding affordability. But the Treasury has consistently understated the extent of public sector pension liabilities. According to the consultancy firm Watson Wyatt, Britain's underfunded public sector pension liabilities reached a total of nearly £1 trillion in March 2006. That is a one with 12 noughts after it. That is more than 80 per cent. higher than the most recent Government estimate and amounts to a whopping £40,000 per household in the UK.
	Stephen Yeo, a senior consultant at Watson Wyatt, has described the Government as
	"taking a rosy view of the cost of public sector pensions".
	The White Paper does nothing to address the cost of public sector pensions, which is a significant omission. Without action to address the long-term affordability of public sector pensions, it is difficult to have confidence in the Chancellor's assessment of affordability and the fiscal position with regard to the basic state pension, which is to be re-linked to earnings.
	Perhaps most significantly of all, I must turn to the seemingly ubiquitous burden of means-testing, which is certainly not a new concern. In 1942, Beveridge noted
	"the strength of popular objection to any kind of means test"
	before warning that "discouraging thrift" would be the inevitable result of a
	"permanent system of pensions subject to means test."
	Yet Beveridge went even further in 1942 than the Government are prepared to go in 2006. He warned:
	"The State in organising security should not stifle incentive, opportunity or responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family."
	To propose a personal pension savings account without a radical reappraisal of the use of means-testing will continue to stifle any incentive to save.
	The Treasury Committee heard time and again in the evidence provided in the course of its inquiry into the national pension savings scheme that the existence of means-testing would be one of the most important factors influencing the success of the proposed scheme. Lord Turner was adamant:
	"A way forward has to be found which achieves affordable and sustainable reform of state pensions which makes sure that means testing does not grow in the way that it would otherwise grow and ideally reduces in extent."
	Yet it is still not clear at all that the Government are pulling in the same direction on the issue of means-testing. Worryingly, Lord Turner also said:
	"We have not had detailed discussions with the Treasury over the course of the last few weeks which would clarify exactly where they stand on the issue of the spread of means testing."
	The Work and Pensions Committee received evidence from the Pensions Policy Institute stating that, even after the reforms proposed by the Pensions Commission, 45 per cent. of pensioners—not the 33 per cent. claimed by the Government—would still be eligible for means-tested benefit in 2050. The Chancellor was quite clear during his evidence to the Treasury Select Committee earlier this year that
	"the long-term solution for pensions is that people are in a position to make their private savings over the course of their lives."
	His commitment to ending the means-testing of pensioners is much less clear, yet it is on that commitment that the success of the proposed reforms hangs.
	It is not just important to encourage people to save; pensioners must also be freed from the indignity of means-tested benefits. Earlier today, I met two of my constituents, Phyllis Webb and Barbara Shillabeer, who are members of the Braintree pensioner action group. I want to be able to go back to Braintree to tell them unequivocally that the basic state pension will, in future, provide them with an income. Just as importantly, I do not want to have to tell my constituents that there is no point in saving because it will not leave them any better off when they come to retire.
	Sixty years ago, Beveridge's recommendation for the introduction of national insurance contributions noted:
	"A revolutionary moment in the world's history is a time for revolutions, not for patching."
	Perhaps we live in less revolutionary times but the lesson remains valid. If we wish to achieve a lasting pensions settlement, we must not deal in half-measures. Uprating the basic state pension and introducing personal pensions savings accounts must go hand in hand with a decline in means-testing to give people the confidence to save for their retirement.
	Perhaps most important, the Government must take steps to account for their unfunded public sector pension liabilities to encourage greater public confidence in the future affordability of all state pension provision. After all, if the Government cannot properly account for their pension liabilities, they cannot hide behind the caveat that an increase in the basic state pension can come about only
	"subject to affordability and the fiscal position."

Diana Johnson: I am grateful to my hon. Friend for that intervention because it leads nicely to the comments that I wanted to make about the need to think carefully about the way in which young people receive financial education. Most young people get lessons from their mum or dad or perhaps listen to their peer group, but the advice and guidance available to young people is limited. We must consider the way in which we engage with young people in schools, colleges and universities, and the use of role models who can send a positive message to young people about the necessity to take financial responsibility early in life and plan one's financial future. We have used role models in other ways, for example, to encourage young people, especially boys, to read books and eat healthier food.
	There is much cynicism about financial advice. Those whom we approach to provide good financial advice must be organisations and groups that we can trust. I was interested in the comments of my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz), about the use of citizens advice bureaux and the important role of trade unions and other voluntary groups.
	I am pleased that the White Paper emphasises the role of personal accounts through the NPSS, which could be important for young people. It is a simple proposition for people to get their heads around—the8 per cent. is divided between the employee, the employer and the state. The personal account will start at 22 and go through to 65. It is interesting that 22 has been chosen as the starting age, and I wonder whether people who are younger than 22 and who want to opt into the account should be allowed to do so.
	The account will be introduced by 2012 and it will help young people to understand how saving for their future can help them. We know that most young people will have many jobs in their employment lifetimes, and they can take the account with them from job to job. I also understand that the self-employed or those who do not work at different points in their lives can also be included in the scheme. Hon. Members on both sides of the House have discussed the need to keep the management costs of the scheme at a minimum, which is correct.
	In the spirit of consensus in the Chamber this evening, will my hon. Friend the Minister for Pensions Reform look at the proposals that the right hon. and learned Member for Kensington and Chelsea (Sir Malcolm Rifkind) introduced in his private Member's Bill, the Rights of Savers Bill, earlier this Session? That Bill would have introduced a savings scheme for people to use flexibly throughout their lives, so they could use that money, for example, to pay for a deposit on a house or to take a career break to access education. Such transactions would be limited and managed, and people would have to pay back the money in order to ensure that they do not reach the age of 65 and find that they have no money in their savings accounts. A flexible savings account is a good idea to allow for the choices that people make throughout their lives. That Bill was considered in Committee, and it contains some ideas that the Government could take forward.
	My right hon. Friend the Member for Southampton, Itchen (Mr. Denham) recently introduced a ten-minute Bill, which was about making sure that jobs are advertised with the full pension benefits clearly set out. That would allow people to make a positive decision based on the pension advantages of a particular job, and it would help young people to make sensible decisions about their financial futures.
	On the role of women, I am pleased that the outdated model that has been used since Beveridge, which involves women being dependent on their husbands for pension provision, has been addressed in the White Paper. That situation is a scandal, and many hon. Members have discussed it this evening. The number of women MPs that we now have in the House of Commons means that the issue has not been allowed to stay at the bottom of the agenda—it has moved right to the top—and it is right that we should sort it out. We know that with a reduction to just 30 years of contributions by 2025, 80 per cent. of women will be entitled to the basic state pension, which is right and proper. We also know that the home responsibilities protection will become a positive weekly credit, which will ensure that more women are included in the basic state pension within the proposals in the White Paper.
	I want to comment on women who have multiple low-paid jobs. We should examine how to include such jobs in the pension provision. My hon. Friend the Member for Bradford, North (Mr. Rooney) said that people with such jobs, who are mainly women, will still not be included, and I wonder whether my hon. Friend the Minister for Pensions Reform will comment on that point.
	I am pleased that the White Paper includes a proposal for a new credit for those who care for more than 20 hours a week for someone who is in receipt of severe disability benefits. In my view, any carer who is caring for someone for more than 20 hours a week should receive that new credit—it should not be dependent on the benefit received by the person for whom they are caring. I could not let this opportunity pass without mentioning the Hull carers centre, which I visited a few days ago. I was lobbied very hard to ensure that carers are kept in the public eye and that those people, who do such sterling work, get the credit that they deserve and the pension that they deserve. I was also asked to raise the issue of people who reach the age of 65 and receive their pension, but suddenly find themselves losing out on their carers allowance. Can that be considered in future?
	I should like to say a few words about raising the retirement age to 68 by 2050. I am very aware that in my constituency, Kingston upon Hull, a baby boy born today will have a life expectancy that is six years less than that of a baby boy born in Kingston upon Thames. There is a marked difference straight away. I hope that the Government will think carefully about how to beef up the work that is already going on with health inequalities and public health to address the problem of different life expectancies across the United Kingdom. We want the White Paper to be fair, but as it is it will not be fair on some of my constituents.

Nigel Waterson: This has been an excellent debate. I particularly enjoyed all the talk about longevity and the amount by which it will have increased during the course of the debate—although there have been one or two speeches during which my whole life has flashed before me. I will not say which ones they were.
	According to my arithmetic, there have been some18 Back-Bench speeches, so I apologise to hon. Members if I do not go through them all but pick out one or two that deserve particular mention. My hon. Friend the Member for Hemel Hempstead (Mike Penning) made a powerful speech on behalf of his constituents whoare scheme members of the Dexion company andhave suffered a great deal. His comments on the ombudsman's report were extremely just and valid. The hon. Member for Belfast, North (Mr. Dodds) also spoke about the ombudsman's report and about the failings of the financial assistance scheme.
	The Chairman of the Select Committee on Work and Pensions, the hon. Member for Bradford, North (Mr. Rooney), had some valuable thoughts on the White Paper to share with us. As always, the right hon. Member for Birkenhead (Mr. Field) had something distinctive to say. Apparently, he is not signed up to the concept of consensus; in fact, he delivered a substantial broadside against the whole idea. He talked about his concerns over what he called the Chancellor's IOU and whether it would ever be redeemed for pensioners.
	My hon. Friend the Member for Weston-super-Mare (John Penrose) made a fluent speech about the need for durability in the system and the reforms, the problems of complexity and the need for stability. Although the hon. Member for Yeovil (Mr. Laws), the Liberal Democrat spokesman, made some sensible points, I was not quite sure at the end of his speech where his party stands on the consensus-building adventure on which we are all now embarked.
	I had the dubious pleasure, as shadow Pensions Minister, of being involved in every Commons stage of what became the Pensions Act 2004. If ever a measure cried out for pre-legislative scrutiny, that was it. But no, the Government drafted the Bill with the minimum of consultation, drove it through with a timetable motion and ignored our regular predictions about the law of unintended consequences. We therefore welcome the fact that the White Paper talks about revisiting the provisions of that Act. I warned at the time that any good that the Government sought to do through the Bill would be overshadowed by the plight of those who had lost pension rights through no fault of their own. My prediction turned out to be true. Nothing has done more to undermine public confidence in the pensions system than the losses felt by those honest, decent people.
	In May 2004, facing defeat in the House, the Government cobbled together their financial assistance scheme. We said from the outset that it would be inadequate. None the less, the Government forged ahead, setting up a wholly separate structure in York to administer it. I even recall proposing amendments in Committee that would have set up a parallel mini-pension protection fund, funded by unclaimed assets but administered by the same people as the main PPF. The Government would not have it, however, and one can now see why.
	The FAS was to be kept quite separate, as it was always going to pay out much smaller benefits than the PPF. The differences are stark. That is true even with the latest review of eligibility. In a recent Westminster Hall debate, the Minister for Pensions Reform made it clear that only about a third of the 125,000 people affected will benefit from the scheme, even with the extended coverage. At that stage—although the figures may have improved in the intervening few days—a grand total of 93 payments had been made, which, according to my arithmetic, leaves only 39,907 to go. He made the position clear:
	"Given the limited amount of money that we had available, it was correct to target it at those closest to retirement".—[ Official Report, Westminster Hall, 20 June 2006; Vol. 447, c. 415WH.]
	Several hon. Members on both sides of the House have explained the unfairnesses that result from those decisions.
	It was obvious at the time, and has become ever more obvious since, that the FAS was designed primarily to get the Government over a temporary problem and to assist some Labour Members in marginal seats, with greater or lesser success, of which my hon. Friend the Member for Hemel Hempstead is living proof. Throughout its short life, the emphasis of the FAS seems to have been on limiting eligibility and excluding claims. The novel concept has been introduced of a core pension, with which the hon. Member for Belfast, North dealt in detail. We have heard that FAS payments are not inflation-linked, that they only start at 65 and when wind-up has been concluded, that they are capped at £12,000, and that the entire payment is subject to tax, despite the expected pensions including a tax-free lump sum.
	That leads us on to the ombudsman's report. She made three findings of maladministration against the Government. It is clear that the Government took steps on two separate occasions to weaken the minimum funding requirement. The report quotes the then Secretary of State saying in March 2000:
	"As a matter of principle, we believe that when someone loses out because they were given the wrong information by a Department, they are entitled to redress."—[ Official Report, 15 March 2000; Vol. 346, c. 308.]
	Ministers have peddled a figure for the cost of compliance with the ombudsman's recommendations that is grotesquely misleading. No wonder Lord Turner appeared to back compensation when he gave evidence recently to the Public Administration Committee. We believe that the Government's position on the report is wholly indefensible.
	We have heard much about consensus today. We in the official Opposition have said for a long time that we need political and social consensus if we are to have sustainable long-term pensions reform. Recently, Ministers have been saying the same; even more recently, they have been putting their money where their mouth is, and we welcome that. Why is consensus so important? Because Governments come and go. I do not mean to be gratuitously offensive to the Government Front Bench when I say that Ministers are here today and gone tomorrow. It is good to see the Minister's distinguished predecessor, the Chief Secretary to the Treasury, the hon. Member for East Ham (Mr. Timms), sitting beside him.
	Nothing would be worse for confidence in the system and for long-term saving than an Opposition with the stated intention of unpicking any reforms when they took office. No doubt the Government have taken a hard-headed view and concluded that consensus is a vital underpinning for their reforms—or, as the Secretary of State put it to the Select Committee, something to make pensions reform "stick". All credit to him for that.
	What, then, does consensus mean? It means that we can seek to reach agreement with the Government on the basis of full information about the various aspects of their proposals. It means supporting the Government when we think they are doing the right thing. How could we do other than that when they are implementing policies from our last manifesto? It means opposing them when they are doing the wrong thing, or doing the right thing in the wrong way.
	However, it is also important to understand what consensus does not mean. It does not mean writing any blank cheques, or abdicating our duties as the Opposition to scrutinise the detail and hold the Government to account. That is not least because we expect and hope to be the Government one day, and that day may not be far off. We want to inherit a pensions system that works, or is on the way to being mended. That means that any reforms must pass our six tests.

James Purnell: This has indeed been a good and important debate. Here we are, six hours after the start, with another hour of life expectancy, as my right hon. Friend the Secretary of State informed us. I read the other day that the best way to improve one's life expectancy is to semi-starve oneself and be exposed to small but regular doses of radiation. I am not sure whether that does increase life expectancy, but it would probably make life seem a lot longer . [ Laughter. ]
	We are serious about creating a consensus on the future of pension policy and this debate has genuinely helped to set that in train. We do not want to create consensus for its own sake or to agree with the Opposition just for the sake of it. Indeed, where there are differences, we will continue to explore them. However, pension policy is different. Workers put away their money for 20, 30, 40 or 50 years and it is therefore right that they should expect politicians to try to create a stable framework within which they can make their decisions.
	Over the past 30 or 40 years, the political class has not achieved that stability. The system has changed frequently and has left savers with what the Pensions Commission found to be the most complex pension system in the world. Our task now is to address that issue and to seek to take the political instability out of the system. Just as Bank of England independence has made it easier for companies to invest, so a consensus on the future of pension policy will make it easier for workers to save. That is why the Government called today's debate and tabled a substantive motion. It gives the House a chance to signal to the public that we will work together where appropriate to seek to create that consensus.
	I welcome the spirit in which Opposition Front Benchers have responded to the motion. Both main Opposition parties have tabled constructive amendments that start from the basis that the White Paper can be the building block for a consensus on the future of pensions. Indeed, the Conservatives' amendment identifies some key concerns and we want to work with them to explore those. We have no objection to their amendment to our motion.
	As the hon. Member for Weston-super-Mare (John Penrose) said in an impressive speech—I do not say that just because I will appear before his Select Committee tomorrow morning—it is important not only to think that we have a consensus, but genuinely to explore whether we do have a consensus. Occasions such as this mean that we can have proper scrutiny of the policies in advance, which is surely far better than finding out later that we did not have the consensus that we thought we did.
	To start with today's pensioners, as several hon. Members did—in particular, my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne)—we believe that we have done a significant amount for them. I shall not repeat everything that my right hon. Friend the Secretary of State said, but we are spending 1 per cent. more of GDP than if we had just continued with the policies of 1997. The White Paper promises to increase pension credit in line with earnings—a major change.
	The second point concerns raising the state pension age. The hon. Member for Angus (Mr. Weir) made it clear that his party would oppose that, and the issue was also addressed by my hon. Friends the Members for Aberdeen, South (Miss Begg), for Dumfries and Galloway (Mr. Brown) and for West Bromwich, West (Mr. Bailey). However, they made the point in a slightly different way. They knew that there were concerns about the state pension age, and wanted them to be addressed. That is the right way to think about the matter.
	The Government accept that questions remain about how the state pension age should rise, and that we must keep open the option of paying pension credit at 65. We also accept that we must continue to look at the extending working ages agenda, and at health inequalities. We recognise that we have to deal with all of that, but those who oppose raising the state pension age must be clear about whether they believe that any such change should play no part in the proposals.
	The Pensions Commission has created a consensus around the fact that people are living longer and that raising the state pension age has to be part of the solution if we really want to tackle the challenges that that raises. Those hon. Members who oppose a rise in the state pension age must explain how they will cope with the fact that in the future people could work less and less yet still expect to have the money to pay for an ever longer retirement. The difficulty is either that far more will have to be levied in taxes, or that people will have to save at a level far higher than has ever before been expected of them.

James Purnell: That is what our health inequalities agenda is about. My constituency suffers from exactly those problems that the hon. Gentleman described, with people dying 10 years earlier than elsewhere, but it is impossible to deal with such problems without raising the state pension age. I assume that he is not proposing differential state pensions for people in different socio-economic classes, and I am sure that he will accept that life expectancy has risen in all socio-economic groups. Although it is right that we must look at how a rise in the state pension age might be implemented, it is clear that it will have to be introduced.
	The second major issue in the debate had to do with personal accounts. My hon. Friend the Member for Bradford, North (Mr. Rooney) made some very good points about that, as did the hon. Member for Bournemouth, West (Sir John Butterfill). Questions were raised about employer contributions, governance, charges, generic advice and compliance, and we want to discuss those matters with all parties in the House. We have said already that we want to invite Opposition Front-Bench Members to our pensions summit, when the details of our policy will be explored.
	My hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) spoke eloquently about a matter that worried a number of hon. Members—the interaction between means-testing and automatic enrolment. How can we automatically enrol people if we are not certain that they will be better off in retirement? Our response is that that is not the test that should be applied. No saving is certain, and people never know for sure what their careers will hold. They do not have 20-20 foresight about when they will work, how much they will earn or when they will be unemployed.
	Instead, the real test of automatic enrolment is whether it will give people a reasonable expectation that they will be better off on retirement for having stayed in the scheme. We believe that we can provide some very good answers to that. In response to the specific request from the Conservative spokesman,the hon. Member for Runnymede and Weybridge(Mr. Hammond), we assure the House that we will be happy to publish the research that we used to make our decision, so that people will be able to look at it and make up their own minds.
	There are two reasons why we believe that people will have a reasonable expectation of being better off under our proposals. First, those who leave their money in a personal account will immediately have it doubled by the employer contribution and the state contribution. Secondly, the charges on personal accounts will be much better, so people will be able to keep much more of their pension pot in retirement—we think about25 per cent. more—than is the case with other forms of saving. The return on personal accounts should compare favourably with other forms of saving, and we believe that that, interacting with our reforms to state pensions, will help us to convince the vast majority of people that they will be better off.
	The key point is that although, under our proposals, as a base case, a third of people would be means-tested, only 6 per cent. of them would be on the guarantee credit alone and thus facing 100 per cent. withdrawal rates. Those people may not have known that they would end up in that situation, so they will be better off due to the existence of the guarantee credit. The alternative would be to tell them, "We know that you do not have a good state pension but we will not provide a safety net for you".
	We shall be able to publish evidence to show that we can give people a reasonable expectation that they will be better off, but the scheme will not involve compulsion. People will be able to make their own decisions, so it is right on the one hand to enrol them automatically—to use inertia for the saver culture—but on the other to leave them with a choice about whether they continue to save.

David Laws: But due to the impact of means-testing, the individuals whom it is most difficult to encourage to make additional provision will have the least incentive to save because their employer contribution will be wiped out. Does not that concern the Minister?

James Purnell: We want to work with the hon. Gentleman on developing those issues, but to respond to his point, if I understand it correctly, people at the guarantee credit level will often have made no contributions because they are low earners, and in any case may not have known in advance that they would end up in that situation. As I said, people do not have 20-20 foresight.
	I shall address the remaining issues as quickly as I can—[ Interruption.] I accept the injunction of the hon. Member for Runnymede and Weybridge and shall take a few more minutes to answer the points that he made. We want to look at the issue raised about levelling down in relation to personal accounts and to work with the Opposition on that. We recognise that there are concerns, but we talked to a large number of employers before we produced the White Paper and they made it clear that where they contribute more than the minimum 3 per cent. to which we have been referring, they do so as a way of retaining and attracting employees. Typically, they contribute far more than3 per cent. The hon. Gentleman was right to say that the other side of the coin of compulsory contributions will be the cost of regulating the schemes. We want to look seriously at where we can deregulate the costs.
	The hon. Gentleman asked whether anything had been ruled out of the regulatory review. I am happy to make it clear that nothing has been ruled out. We have made it clear that we want to balance employer costs against protection for employees, and I am sure that he will agree with that. There will be a stakeholder scheme, but we will look at all the issues and come back to him in due course.
	A number of points were raised about the ombudsman. We have great sympathy for people who lost their pensions, which is why we extended the financial assistance scheme. Members asked whether people could receive an interim payment before the age of 65. They can indeed apply for that.
	We have been clear about the core pension definition; it is in the leaflet and there is nothing underhand about it. People who do not qualify under the 15-year rule may qualify for deemed buy-back into their state second pension rights. I will be happy to write to Members whose constituents are in that situation.
	To reiterate our argument: we do not accept that we caused the downfall of those pension schemes and we do not accept that we are liable for them. We think that the ombudsman made a leap of logic that is not justified by the evidence. There were never guarantees from the Government for those schemes, and although we have huge sympathy for people, which is why we set up the financial assistance scheme, it would be an unjustified step to make the further argument that we were liable for those losses.
	My final point is about public sector pensions, which were raised by several Members. At the last election, the Conservatives said that they would not implement changes to public sector pensions. They said:
	"We have no current plans to alter the terms of public sector schemes...We know there is some concern over extending the public sector retirement age and we will listen to any practical concerns people have."
	That is a significant difference from the position they appeared to adopt today. However, in the spirit of consensus, I do not want to push that point too hard; nor the point made earlier that they have made spending commitments of £15 billion by 2050. Nor shall I add up all the spending commitments that the Liberal Democrat spokesman has made today. According to my calculations, on top of his £10 billion for the citizens pension, there was another £3.4 billion on the basic state pension, £400 million on uprating pensions for people overseas and another £3 billion to implement the ombudsman's report. He has made a fairly significant number of spending commitments.

Alison Seabeck: I would wholly support that drive. I am sure that the Minister will answer my hon. Friend's excellent question when she responds to the debate. Our local council in Plymouth is already working closely with the police and local publicans to try to cut down the number of alcohol-fuelled incidents.
	If we also consider the cost incurred by business because of lost work days and poor productivity, and the often hidden costs that alcohol dependency can have on family life—a high prevalence of domestic violence is linked to the consumption of alcohol—we begin to understand why support services in this field are so vital. However, there is hope. Although the mortality rate from acute alcohol-related liver disease is very high—up to 60 per cent. in severe cases—patients do survive. If they remain abstinent, their clinical prognosis is surprisingly good. The liver will regenerate, and many patients do well in the long term. The key is for them to reduce their alcohol intake to zero, or near zero.
	Numerous studies have shown that when patients are properly followed up and receive counselling, up to50 per cent. of those who are admitted with alcoholic liver disease remain abstinent. Significantly, patients maintain those levels of success 12 months later and report improvements in their mental health and general well-being.
	There is evidence from other parts of the UK of the benefits of proper follow-up care. A service that was set up in Southampton resulted in extremely high follow-up rates and rates of sustained abstinence. The Southampton group—
	 It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
	 Motion made, and Question proposed, That this House do now adjourn .—[Mr. Heppell.]

Alison Seabeck: The Southampton group estimated a drop of 80 per cent. in in-patient bed days following intervention, which represents a saving of approximately £100,000 in the one-year period studied. However, that estimated saving takes into account only patients with established liver disease; in reality, if those with all alcohol-related conditions were included, the savings would be much higher.
	The United Kingdom alcohol treatment trial study estimated that £5 could be saved from the public purse for every £1 spent on treatment, yet the finance being offered for alcohol services falls well below that for those who are drug dependent. That is despite the fact that there is generally a more positive self-referral level among people who are alcohol dependent, and, therefore, a much greater likelihood of their moving towards abstinence and better health. Action on Addiction tells me that £1.5 billion is spent assisting 160,000 drug users in the UK—the target is to reach 250,000 of them—while the amount spent on helping the equivalent 160,000 people known to be alcohol dependent is a mere £217 million. There are probably more than 1 million alcohol-dependent people in the UK. It has been estimated that if alcohol treatment were provided for another 10 per cent. of that dependent drinking population, the public sector could save between £109 million and £145 million each year.
	The balance appears to be skewed, and the net result is that centres such as the Harbour centre in Plymouth—it was set up in 1984 and put in place an alcohol services team approximately two years ago, heralding a new era in alcohol services in the city—are now struggling. The Harbour centre attracted no ring-fenced funding, cost pressures are threatening its closure, and all staff are on notice. Is that perhaps because alcohol rehabilitation does not attract the Government targets that drug rehabilitation does? I would like the Minister to answer that question.
	Although I accept that there is a need to invest in support for those who are drug dependent—indeed, in Plymouth significant funding is available in this area, for which I am grateful—there is also a clear and ongoing need to fund the expertise that deals specifically with alcohol addiction. I am also reliably informed that where drug addiction is to be found there is also alcohol addiction, but the latter is clearly the poor relation in terms of Government funding.
	A review is being carried out locally on how we can best take forward these services to tackle addictions across the piece, and I welcome the fact that the commissioning process is being looked at; we probably all accept that it could be improved locally. The review will examine whether the Harbour centre as it stands offers the best way to take matters forward, or whether we need an alternative vehicle. I hope that that review will identify needs better and allow us to deliver the service that we in Plymouth need to provide for people who are struggling to defeat their demons.
	At present, we are still only scratching the surface. All the evidence suggests that rehabilitation, particularly for alcohol-dependent people, works. It reduces hospital admissions and morbidity, and saves huge amounts of money throughout health and social services in the long term. I genuinely hope that the review will conclude that we in Plymouth need an expansion of community and hospital-based services and a targeted Government drive to address this increasing problem.
	Part of the process has to include an expansion of education programmes. Government programmes flagging up the dangers to young people are vital, and I know that my hon. Friend the Minister and her Department already support such campaigns. We also need to reach parents, because it is often in the home where children first gain access to alcohol. Given the more stringent action being taken against retailers who sell drink to under-age drinkers, young people are likely to start their addiction by raiding their parents' drinks cabinet or fridge. Children in families where heavy drinking is the norm are likely to follow suit. Sending messages to parents via their children's school is perhaps a possible route.
	My hon. Friend the Minister will be aware that alcohol abusers are far more likely to self-refer than drug users, as is evidenced in Plymouth. Self-referrers, according to the Department of Health, do not use the primary health care system as their first point of entry to access care, unlike those with medical disorders or diseases. It is therefore critical that alternative routes to treatment continue to be made available and are well financed. That is why the loss or cutting back of alcohol services in Plymouth would be a serious setback in the fight against alcohol-related illness.
	The Harbour centre provides an outreach team offering prevention and risk management services, and it is that team that has had to be scaled back. Last year staff at the centre dealt with 356 referrals, of whom176 have been successfully treated, but now the centre can no longer operate a waiting list, so people are not able to self-refer in the same way. Staff have to limit their advice and support to only 140 clients, and they will have to turn away people who genuinely want to break their habit. After the public consultation on the Government White Paper "Choosing Health" the Minister said that people wanted to take responsibility for their own health but required and expected support services to enable them to make the right choices, and it is the Government's responsibility to provide the right environment for people who want to make those informed choices to live healthier lives.
	Plymouth city council has been able to offer a short-term rescue package, but only until October, and it does not allow for self-referrals which, as I have said, are high among alcoholics. From an overall budget of £2 million for drug and alcohol services, the Harbour centre has been able to use £160,000 specifically for its alcohol services team. That funding is available only because of the link between drug and alcohol addiction. Only one of the posts on the team is a staff position funded by the local primary care trust to provide specific advice for those who self-refer with alcohol problems. I do not want to see the loss of the expertise that staff at the Harbour centre have. Services may need to be reconfigured, but we need to keep those people in our city. The people of the city who are affected by alcohol greatly value the support that they give.
	It is right that both drug and alcohol services in the city should be reviewed, but I cannot for the life of me accept that they should be diminished further, given the size and nature of the problem that we have in Plymouth. We know that at Derriford hospital over a two-year period, alcohol withdrawal treatment admissions doubled. One day in January across Plymouth hospital units there were 80 in-patients being treated for alcohol-related problems. We shall not be able to reduce those figures if we do not invest in the services necessary to support those who are alcohol dependent. That means funding services of the type currently provided by Harbour and retaining that expertise in the city.
	I urge the Minister to consider carefully the funding gap between drug and alcohol services, both nationally and in Plymouth. To paraphrase a letter that I received from a recovering alcoholic living in my constituency, and still visiting the Harbour centre, we should do something about it. We need to understand better the outcomes that are achievable through funding alcohol services and therapeutic counselling and, if necessary, to apply targets. I am sure that that would be welcomed by the hepatology team at my local hospital. I look forward to hearing the Minister's comments on an issue that I know she cares deeply about.

Gary Streeter: I attended the same meeting as the hon. Member for Plymouth, Devonport (Alison Seabeck); the three Plymouth MPs work closely together and we often attend the same briefings. We were shocked by the alarming increase in the number of people, particularly young people, who are now suffering alcohol-related diseases.
	It strikes me that one of the key things that must happen in this country is the development of greater awareness of the difficulties and dangers of excessive drinking. When those who still smoke reach for their packet of cigarettes, they see huge warnings telling them that smoking kills, and smoking can damage their health. I wonder whether we are many years away from putting similar labels on bottles of alcohol. I am not necessarily advocating a similar approach, but we need to have a debate on the advertising of alcohol and the suggestion that it is now part and parcel of life. So many young people today go out at the weekend just to get drunk, not, as we used to—I sound like my father—to have a good time. They go out with the express intention of getting drunk—becoming legless, getting blasted—without realising, and perhaps not knowing, the serious health risks involved in that sort of activity.
	We have seen from our excellent local hospital, Derriford, that the evidence of alcohol-related diseases is spiralling, and that is alarming. I support the hon. Member for Plymouth, Devonport (Alison Seabeck) in her comprehensive outline of the arguments in that respect. I am concerned that when the incidence of alcohol-related diseases is increasing and more and more young people are drinking to greater and greater excess, the only specialist team in Plymouth that can counsel people who are caught up in heavy drinking or addiction to alcohol is, as we have heard, under threat.
	We have the excellent Harbour alcohol and drug services team. Those who work on the alcohol side of it are on notice that unless new funding arrangements can be found, come September they will not be in a job. That means that the many people who have benefited from their services in Plymouth over recent years will no longer be able to benefit from them.
	That would be bad enough on its own, even if it were not for the fact that, as the hon. Lady has demonstrated, rehabilitation for those who are addicted to alcohol works. Counselling and support services can get people off alcohol or encourage them to drink less.
	I appreciate the fact that the Minister will not have tremendous knowledge of the local scene in Plymouth. She may rightly say that discretion is given to the local primary care trust and to the local hospital in deciding how they spend money to provide for the services that we are discussing. I am here to support the hon. Member for Plymouth, Devonport. We have a particular problem in Plymouth. Will the Minister do what she can to look into the situation and put in place adequate funding arrangements to provide the alcohol-related support services that the people of our region so desperately need?

Linda Gilroy: I congratulate my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck) on the strong case that she has made for resourcing the services in Plymouth. We have always been proud of the Harbour centre. It has done a good job, but it has had to struggle against the rising tide of the problems that people bring to it. It has been somewhat better resourced on the drugs side but there has always been underfunding in dealing with alcohol. That is something that is reflected not only in our city but elsewhere.
	In my earlier intervention I asked my hon. Friend the Minister whether she would consider what she could do on the preventive side. That could pay huge dividends in the longer term as well as the urgent need for resourcing for which my hon. Friend has made such a strong case.
	In Plymouth, we are already trying to help ourselves in that respect. The city council is working alongside the local strategic partnership. It is considering the possibility of having a plan for our evening and night-time economy, so that we can develop an approach to our wonderful city centre, which is often hijacked at weekends by young people who flow into the empty space that is left. Those young people come not only from Plymouth itself but from round and about. My hon. Friend the Member for Cleethorpes (Shona McIsaac), the Parliamentary Private Secretary who is supporting the Minister, knows Plymouth well. She knows the case that we are making, having spent some of her younger years in Plymouth.
	I ask the Minister to talk with her colleagues about the possibility of bringing in some funding to employ managers of the evening and night-time economy in places such as Plymouth. We are struggling with these issues. My hon. Friend knows that we face many challenges across the piece in Plymouth in health, antisocial behaviour and education. Our local strategic partnership has four theme groups—healthy, wealthy, safe and wise—and the healthy group as well as the wealthy are keen to try to support the development of the evening and night-time economy and to emulate the successful business improvement districts that we have in the city centre.
	We hope that we can encourage businesses to cluster around the idea of a managed evening and night-time economy. I have been championing the cause of alcohol disorder zones, as that is something that we face in Plymouth on occasions. I feel that we need the new measure recently introduced by the Government to act as a fall-back for us, so that we can bring some sense of order to some of the wilder parts of Plymouth.

Caroline Flint: I congratulate my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck) both on securing this debate and on the support that she received from the hon. Member for South-West Devon (Mr. Streeter) and my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy).
	The misuse of alcohol not just in the past few years but over a steady period of time should give us all cause for concern, and I wish to explain how we are trying to tackle that difficult problem, which presents a range of challenges, including the need to prevent the problem and improve people's understanding of the dangers of alcohol misuse. We have focused on the need to increase awareness of the strength of drinks on the market, compared with their strength some years ago. We must improve people's understanding of information on the units of alcohol in different drinks, but that task is made more complex by the fact that wine, beer and alcopops each have a different alcohol content.
	When providing treatment, we must weigh the needs of chronic alcohol dependants against the needs of people who need a different service, because their excessive drinking may become hazardous over a long period of time. It is a challenge both nationally and locally to identify the way in which we can best deal with that group—more commonly known as binge drinkers. To take up the point made by the hon. Member for South-West Devon, people are not aware of the dangers 10 years down the line of their over-indulgence, even if it only takes place on a Friday and Saturday night every week, and we must attend to that.
	I should like to talk about the problems in Plymouth before I make some general points about our national strategy. I am concerned about the problems that have affected the Harbour alcohol service in Plymouth, which I visited a couple of years ago. I was pleased that with the support of the drug and alcohol team, the project was trying to find constructive ways to provide both drug and alcohol services because, like services in many other parts of the country, it has become increasingly aware of the connection between the two substance addictions. Having met people with a substance addiction, I know that a number of individuals addicted to class A drugs are addicted to alcohol, too. The pooled treatment therefore allows for the treatment and support of people with those different addictions. Dual diagnosis can help to identify mental health problems and alcohol abuse, and we have published good practice guidance on services for individuals with co-existing mental health and substance misuse problems, aimed at people who commission and provide mental health and substance misuse services to help them understand how the problems are connected.
	I share the commitment of my hon. Friend the Member for Plymouth, Devonport to improving the provision and quality of services in Plymouth and elsewhere, and we must try to understand the problems faced by the Harbour project if we are to do so. I am pleased that the Plymouth drug and alcohol action team, which oversees the planning and commissioning arrangements for both drug and alcohol services in the city, is leading the development of an alcohol harm reduction strategy for Plymouth. We conducted our own audit of alcohol treatment and, in some cases, there was good news on treatment services, particularly for chronic alcohol dependants. Around the country, the picture was patchy, but the audit allowed us to consider how we could contribute to strengthening commissioning in this area. I understand that the work in Plymouth will lead to an integrated alcohol commission strategy, linking investment in health, social care and criminal justice, to tackle some of the concerns that have been raised this evening.
	Alcohol treatment in Plymouth is predominantly centred around Harbour, an active partnership between the NHS, social services and the non-statutory sector, and it has carried out some important and beneficial work for the people of Plymouth. I understand that the team at Harbour has reduced dramatically the previous waiting list for those with alcohol problems, working closely and meaningfully with different sectors to achieve this reduction, and they are to be congratulated on that.
	As the PCT and others are exploring how a more strategic approach to the delivery of services for those with alcohol problems will be developed for the future, it is clearly rather early for me to suggest what form that should take. But I am sure that Harbour's contribution will be taken into account as will where that might fit in a future service providing stronger commissioning and stronger identification of the problems. That takes me back to my point about the issues that affect chronic alcohol dependence compared with those for whom drinking is becoming perhaps not even unsafe but a ritual that can lead to some particular medical problems, such as liver damage and a host of others, as has been outlined. I understand that Harbour is also considering steps to improve its own financial arrangements, and that is to be welcomed.
	The Government have sought to assist local areas in the commissioning of these vital services, which I hope will be seen as supportive of the review in Plymouth. In 2005 we published the alcohol needs assessment research project and, as I said, that provided the first ever comprehensive picture of alcohol-related needs and the availability of treatment, which before that mapping exercise had been anecdotal. We are now much clearer about the level of demand for alcohol treatment services and the task and challenge facing us. We know, for example, that £217 million is investedin alcohol treatment, with 63,000 people receiving treatment for alcohol-related disorders. However, we also know that the level of provision varies widely, with some areas being able to provide services for those that need them, but others having much lower levels of provision when compared with local needs.
	Supporting local commissioners and partnerships in addressing those variations is a priority for the Department. At Alcohol Concern's conference in November last year, I was pleased to be able to announce the publication of guidance for developing a local programme of improvement for alcohol misuse. I hope that those working in this area in Plymouth will find that useful. It provides detail on the evidence of alcohol harm to individuals, families and communities, and our ideas and aspirations for identifying the problem and improving health.
	The guidance also presents some very clear economic arguments for action. That is important when PCTs and local authorities, perhaps through the local strategic partnerships but also local area agreements, are thinking about how this fits in the context of the wider needs of the community in terms of regeneration and the economy, but also the social cost of doing nothing.
	Every £1 spent on alcohol treatment would save£5 on wider public sector costs. My hon. Friend the Member for Plymouth, Devonport referred to the issues around time spent in hospitals and bed days due to admission for a wider range of chronic conditions, including diabetes, heart disease, cancer, hypertension, and, of course, cirrhosis of the liver, all of which can be linked to alcohol. I am sure that each of us here this evening could add many more examples of where alcohol is part of a bigger problem in our communities.
	We have also set out in the guidance some practical steps for local health organisations, local authorities and others seeking to work with the NHS to tackle alcohol misuse. We are providing practical guidance to improve screening and brief interventions for those who are drinking at hazardous and harmful levels but do not necessarily see it as a problem that requires treatment in the traditional sense of that word. In doing that, we can assess local need, identify the local service gaps and examine the partnerships between primary care trusts, local authorities, accident and emergency departments and others in delivering some of the screening and brief interventions in a way that is, I believe, good value for money.
	A database, developed with the North West Public Health Observatory, was made available in December 2005. It will help regions determine local levels of misuse and identify gaps in treatment. Later this week, I will launch "Models of Care for Alcohol Misusers", which the Department commissioned from the National Treatment Agency for Substance Misuse. It sets out a framework for commissioning and providing intervention and treatment for adults who are affected by alcohol misuse. It sets out how we can strengthen the arguments for commissioning and the success of commissioning in what is purchased and tendered for by organisations that believe that they can play a part in providing services.
	My hon. Friend the Member for Plymouth, Sutton made a point about prevention. We are working closely with the Home Office on a joint campaign to promote responsible drinking among young people through clearer and better targeted information. That is planned for later this year. We are also working with the alcoholic drinks industry and non-industry stakeholders such as the British Liver Trust on promoting more responsible drinking and preventing alcohol misuse.
	In answer to a point made by the hon. Member for South-West Devon, I have asked a group of industry representatives to work with Department officials to consider sensible drinking messages. The position is not the same as that on cigarettes but it might be helpful to explore sensible drinking messages and clearer unit information on the products and at the point of sale. Of course, alcohol should be included when schools deal with substance misuse, alongside illegal drugs, cigarettes, prescription drugs and glue. Part of dealing with the problem is understanding the way in which alcohol misuse has changed, and promoting a better understanding among young people of the dangers that they present to themselves.
	The balance of funding between drugs and alcohol is difficult to achieve. Separate funding in the NHS is given only to drug expenditure because it was believed to be a poor relation in NHS priorities. That expenditure is supported by Home Office investment. That is not to say that we have not been able, more recently, to take stock of what is happening with alcohol and ascertain where we can achieve better connectivity between the different forms of substance misuse and the different levels and perceptions of misuse. We need to pay attention to that.